Climate change is an existential threat to the planet and an emerging and increasing threat to the global financial system and economy, including our own. At the same time, the transition to a net-zero economy represents an historic economic opportunity for companies, industries, and countries.
The U.S. Department of the Treasury is committed to leveraging the full extent of its capabilities in support of the Biden Administration’s government-wide approach to addressing climate change. Treasury is working to enable and expedite the whole-of-economy net-zero transition while promoting the resiliency of the financial system to climate-related risks. Treasury is also actively working to ensure that the benefits of clean energy investments reach low-income or underserved communities, as well as coal and other energy communities and those that have borne the brunt of legacy pollution.
Since tackling climate change requires global action, Treasury is also focused on helping the United States mobilize and provide the climate finance, policy advice, and technical assistance that can help emerging and developing countries accelerate progress on climate mitigation, adaptation, and resilience.
Since taking office in January 2021, Secretary of the Treasury Janet L. Yellen has prioritized climate issues at the Treasury Department. She appointed the first-ever Climate Counselor and established a Climate Hub in the Office of the Secretary to help set the strategic direction of Treasury’s climate work and coordinate information sharing across the Department. She also took steps to integrate climate issues across the departmental offices, which have responsibility for day-to-day policy design and execution of Treasury’s ambitious climate-related priorities.
- The Climate Hub provides overarching strategic direction and coordination. It also tracks and facilitates progress to advance Treasury’s Strategic Plan goal on Combatting the Climate Crisis; identifies opportunities for greater climate ambition; helps to represent Treasury’s climate work externally and with other agencies; and provides additional resources for priority workstreams.
- The Office of International Affairs leads Treasury’s international engagement, including: climate finance negotiations; climate policy at the Multilateral Development Banks and the International Monetary Fund; oversight of environmental trust funds, such as the Green Climate Fund, Climate Investment Funds, and Global Environment Facility; implementation of the Just Energy Transition Partnerships; representation and engagement in multilateral forums such as the G7, G20 (including co-chairing its Sustainable Finance Working Group), Asia-Pacific Economic Cooperation Forum, Coalition of Finance Ministers for Climate Action, Financial Stability Board, and Organization for Economic Cooperation and Development; climate finance-related trade policy; and multilateral sustainable infrastructure initiatives.
- The Office of Domestic Finance leads Treasury’s climate-related work with respect to the U.S. financial system, domestic community investment programs, household finances, and engagement with the insurance sector and state and local governments. It also includes the Financial Stability Oversight Council (FSOC) Secretariat, which coordinates among FSOC member agencies to advance the recommendations in the FSOC’s 2021 Report on Climate-Related Financial Risk.
- The Office of Tax Policy leads the development of tax policy related to climate and energy security, including implementing provisions in the Inflation Reduction Act of 2022, which is considered the largest investment in addressing climate change in U.S. history. The Office of Tax Policy is currently developing guidance to implement the Inflation Reduction Act’s tax law changes and is partnering with the IRA Program Office on broader IRA implementation efforts.
- The IRA Program Office partners with the Office of Tax Policy on the implementation of the Inflation Reduction Act, with particular focus on operational issues and stakeholder outreach related to the clean energy tax incentives.
- The Office of Economic Policy leads on economic analysis of climate and energy-related policies, interacts with other executive branch offices on climate and energy analysis, and supports the integration of climate in the development of the President’s budget projections.
- The Office of Terrorism and Financial Intelligence works to protect the U.S. and international financial systems from abuse by illicit actors, including by combatting nature crimes such as wildlife trafficking and illegal logging and associated trade, criminal activities associated with illegal, unreported, and unregulated (IUU) fishing, and illegal mining.
- The Office of Management is working to make Treasury’s facilities and operations more resilient to the effects of climate change, including extreme-weather events. It is also charged with procuring electric vehicles to reduce Treasury’s fleet emissions.
REMARKS AND ANNOUNCEMENTS
Remarks by Secretary of the Treasury Janet L. Yellen
- July 20, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at Selex Motors in Hanoi, Vietnam
- June 30, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at PosiGen in New Orleans, Louisiana
- June 15, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at the Coalition of Finance Ministers for Climate Action Event
- March 29, 2023: Remarks by Secretary of the Treasury Janet L Yellen at Federal Advisory Committee on Insurance Meeting
- March 7, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at the First Meeting of the FSOC Climate-related Financial Risk Advisory Committee
- February 8, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at Ultium Cells in Spring Hills, Tennessee
- January 25, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at Dinokeng Game Reserve
- January 24, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at Green Climate Fund Agriculture Site
- October 26, 2022: Remarks by Secretary of the Treasury Janet L. Yellen at Today’s Stakeholder Roundtable on Clean Power Generation
- September 27, 2022: Remarks by Secretary of the Treasury Janet L. Yellen at Cypress Creek Renewables in North Carolina
- March 3, 2022: Remarks by Secretary of the Treasury Janet L. Yellen at the Climate Transition: Federal Policy and State and Local Government Best Practices Roundtable
- November 3, 2021: Keynote Remarks by Secretary of the Treasury Janet L. Yellen at COP26 in Glasgow, Scotland at the Finance Day Opening Event
- October 21, 2021: Remarks by Secretary Janet L. Yellen at the Open Session of the Meeting of the Financial Stability Oversight Council
- October 12, 2021: Remarks by Secretary of the Treasury Janet L. Yellen at the Countdown Summit
- July 11, 2021: Remarks by Secretary of the Treasury Janet L. Yellen at the Venice International Conference on Climate
- May 20, 2021: Remarks by Secretary of the Treasury Janet L. Yellen on the Executive Order on Climate-Related Financial Risks
- April 22, 2021: Remarks by Secretary of the Treasury Janet L. Yellen at the Leaders Summit on Climate
- April 21, 2021: Secretary of the Treasury Janet L. Yellen’s Remarks to the Institute of International Finance
- April 6, 2021: Remarks by Secretary of the Treasury Janet L. Yellen addressing the threat of climate change to the Coalition of Finance Ministers for Climate Action
Implementing the Climate and Energy Security Provisions of the Inflation Reduction Act
The Inflation Reduction Act is the single most significant legislation to combat climate change in our nation’s history. The vast majority of the law’s climate change investment is delivered via tax incentives, putting Treasury at the forefront of this landmark legislation. Since the measure was signed into law in August 2022, Treasury has worked expeditiously to write the rules that will make real the promise of this legislation. Below is a roundup of work related to implementing this landmark law For more information, including guidance released to date, please visit the Internal Revenue Service’s website: Credits and Deductions Under the Inflation Reduction Act of 2022 | Internal Revenue Service (irs.gov)
- July 18, 2023: READOUT: U.S. Department of the Treasury Hosts Tribal Consultation on Inflation Reduction Act Provision to Expand Clean Energy Incentives to Tribal Governments
- June 27, 2023: Treasury Releases Analysis of the Boom in U.S. Construction of Manufacturing Facilities Driven by Invest in America Agenda
- June 22, 2023: Remarks by Deputy Secretary of the Treasury Wally Adeyemo at Carnegie Endowment for International Peace on the Inflation Reduction Act
- June 16, 2023: Treasury Office of State and Local Finance Convenes Discussion on IRA Implementation
- June 14, 2023: U.S. Department of the Treasury, IRS Release Guidance on Provisions to Expand Reach of Clean Energy Tax Credits Through President Biden’s Investing in America Agenda
- May 31, 2023: U.S. Departments of Treasury and Energy Release Additional Guidance on Inflation Reduction Act Programs to Incentivize Manufacturing and Clean Energy Investments in Hard-Hit Coal Communities
- May 12, 2023: Treasury Department Releases Guidance to Boost American Clean Energy Manufacturing
- April 27, 2023: READOUT: Treasury Department Convenes Roundtable Discussion on Inflation Reduction Act Incentives for Underserved Communities
- April 14, 2023: READOUT: Treasury Convenes Roundtable Discussion on Inflation Reduction Act Incentives for Underserved Communities
- April 4, 2023: Treasury Releases Guidance to Drive Investment to Coal Communities
- March 31, 2023: Treasury Releases Proposed Guidance on New Clean Vehicle Credit to Lower Costs for Consumers, Build U.S. Industrial Base, Strengthen Supply Chains
- March 22, 2023: Remarks by Assistant Secretary for Tax Policy Lily Batchelder on Implementation of the Inflation Reduction Act’s Clean Energy Provisions
- February 13, 2023: Treasury, Energy Release Guidance on Inflation Reduction Act Programs to Incentivize Investments in Underserved Communities, Hard-Hit Coal Communities
- February 3, 2023: Treasury Updates Vehicle Classification Standard for Clean Vehicle Tax Credits Under Inflation Reduction Act
- January 29, 2023: Statement from Deputy Secretary of the Treasury Wally Adeyemo on Implementation of Strong Inflation Reduction Act Worker Protections
- January 17, 2023: Remarks by Deputy Secretary of the Treasury Wally Adeyemo at White House event “Lowering Costs: Inflation Reduction Act Briefing”
- December 29, 2022: Treasury Releases Additional Information on Clean Vehicle Provisions of Inflation Reduction Act
- November 29, 2022, Treasury Hosts Tribal Consultations on the Inflation Reduction Act
- November 29, 2022: Treasury Announces Guidance on Inflation Reduction Act’s Strong Labor Protections
- November 4, 2022: READOUT: Stakeholder Roundtable on Clean Vehicles and the Inflation Reduction Act
- November 3, 2022: Treasury Seeks Public Input on Additional Clean Energy Tax Provisions of the Inflation Reduction Act
- October 31, 2022: READOUT: Stakeholder Roundtable on Investor Perspectives on Climate Change, Clean Energy, and the Inflation Reduction Act
- FACT SHEET: Four ways the Inflation Reduction Act’s Tax Incentives Will Support Building an Equitable Clean Energy Economy
- October 27, 2022: READOUT: Stakeholder Roundtable on Climate Impact, Equity, and the Inflation Reduction Act
- October 26, 2022: READOUT: Stakeholder Roundtable on Clean Power Generation and the Inflation Reduction Act
- FACT SHEET: Treasury, IRS Open Public Comment on Implementing the Inflation Reduction Act’s Clean Energy Tax Incentives
- October 5, 2022: Treasury Seeks Public Input on Implementing the Inflation Reduction Act’s Clean Energy Tax Incentives
- August 16, 2022: Treasury Releases Initial Information on Electric Vehicle Tax Credit Under Newly Enacted Inflation Reduction Act
Advancing Climate Action Globally
Treasury plays a leadership role in developing the U.S. Government’s international climate finance agenda and engages foreign counterparts to increase global climate ambition and support developing countries adapt to a changing climate. Treasury’s work on international climate policy includes bilateral engagement with finance ministry counterparts and in multilateral forums as well as overseeing and engaging with multilateral financial institutions, including multilateral climate trust funds. Below is a subset of Treasury’s international climate agenda and recent accomplishments.
- April 13, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at Millennium Challenge Corporation Indonesia Compact Signing Ceremony
- February 16, 2023: Government of Indonesia and International Partners Launch Just Energy Transition Partnership Secretariat to Drive Indonesia’s Energy Transformation
- January 31, 2023: Remarks by Treasury Assistant Secretary for International Trade and Development Alexia Latortue at the OECD Community of Practice on Private Finance for Sustainable Development Conference
- January 27, 2023: Remarks by Secretary of the Treasury Janet L. Yellen to Press at Nkangala Technical and Vocational Education and Training College in Emalahleni, South Africa
- January 27, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at Lunch with Local and International Philanthropies on South Africa’s Just Energy Transition Partnership (JETP)
- January 24, 2023: Remarks by Secretary of the Treasury Janet L. Yellen at Green Climate Fund Agriculture Site
- G7 Finance Ministers and Central Bank Governors´ Statement on Climate Issues
- November 15, 2022: Treasury Secretary and Special Presidential Envoy for Climate Support the Launch of the Just Energy Transition Partnership (JETP) in Indonesia
- November 10, 2022: Assistant Secretary Alexia Latortue and Climate Counselor John Morton Lead Treasury Delegation at COP27
- November 7, 2022: U.S. Departments of the Treasury and State, and South African President Cyril Ramaphosa Announce Endorsement of the South Africa Just Energy Transition Partnership Investment Plan
- October 20, 2022: READOUT: Deputy Secretary of the Treasury Wally Adeyemo’s Visit to Thailand
- October 6, 2022: Treasury Announces $1 Billion Loan for Clean Technology Fund, Advancing U.S. Climate Commitments and Just Energy Transition Partnerships
- October 6, 2022: Remarks by Secretary of the Treasury Janet L. Yellen at the Center for Global Development
- September 15, 2022: READOUT: Treasury Climate Counselor Morton and Deputy Special Envoy for Climate Duke Travel to Indonesia to Advance the Just Energy Transition Partnership
- August 19, 2022: READOUT: Under Secretary Brian Nelson’s Visit to Brazil
- July 22, 2022: READOUT: Treasury Climate Counselor joins International Partners in South Africa to further the Just Energy Transition Partnership
- July 6, 2022: READOUT: Secretary of the Treasury Janet L. Yellen’s Third Meeting with the Heads and Private-Sector Leads of the Multilateral Development Banks to Discuss Climate Finance, with a Focus on Adaptation
- June 26, 2022: Statement by Secretary Yellen on President Biden’s Announcement of the Partnership for Global Infrastructure and Investment
- April 27, 2022: READOUT: Secretary of the Treasury Janet L. Yellen’s Meeting with Indonesia Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan
- October 12, 2021: Readout: Secretary of the Treasury Janet L. Yellen’s Second Meeting with the Heads and Private-Sector Leads of the Multilateral Development Banks to Discuss Climate Finance
- August 16, 2021: Treasury Announces Fossil Fuel Energy Guidance for Multilateral Development Banks
- July 22, 2021: Readout: Secretary of the Treasury Janet L. Yellen’s Meeting with the Heads and Private-Sector Leads of the Multilateral Development Banks to Discuss Climate Finance
Assessing and Mitigating Climate-Related Risks to the Financial System
In October 2021, the Financial Stability Oversight Council identified climate change as an emerging threat to financial stability and issued over 30 related recommendations to financial regulators. The Council and its members have been working in close coordination since the report to advance these recommendations, and have made considerable progress in the areas of capacity building, disclosure, data, and risk assessment. As climate change continues and associated economic costs are expected to grow, the Council recognizes the critical importance of ensuring the resilience of the financial system.
Below please find announcements on treasury.gov. For more information, please refer to announcements by Financial Stability Oversight Council member agencies.
- Minutes of the March 7, 2023 CFRAC meetingDecember 16, 2022: FSOC highlights climate in its Annual Report 2022
- October 3, 2022: FSOC Establishes New Climate-related Financial Risk Advisory Committee (CFRAC)
- July 28, 2022: Financial Stability Oversight Council Releases Factsheet on Climate-Related Financial Risk Efforts
- March 21, 2022: Statement by Secretary of the Treasury Janet L. Yellen on SEC Proposal to Enhance and Standardize Climate-Related Disclosures for Investors
- December 17, 2021: FSOC establishes the Climate-Related Financial Risk Committee (CFRC)
- October 21, 2021: FSOC Identifies Climate Change as an Emerging and Increasing Threat to Financial Stability and releases report on climate-related financial risk
- Landing page for the CFRAC
Climate Change and the Insurance Sector
The increased frequency and severity of climate-related disasters, as well as the magnitude of associated insured losses, highlight the significance of climate-related financial risks and the role of insurers in responding to such risks. The President's May 20, 2021 Executive Order on Climate-Related Financial Risk recognizes the important role of the insurance sector. In response to the May 2021 Executive Order, the Federal Insurance Office (FIO) is advancing three climate-related priorities: (1) assessing climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability; (2) assessing the potential for major disruptions of private insurance coverage in U.S. markets that are particularly vulnerable to climate change impacts, as well as facilitating mitigation and resilience for disasters; and (3) increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals.
- June 27, 2023: Remarks by Assistant Secretary for Financial Institutions Graham Steele at Event Hosted by the Brookings Institution's Assessing Insurance Regulation and Supervision of Climate-Related Financial Risk
- June 27, 2023: Treasury’s Federal Insurance Office Releases Report Assessing Climate-Related Risk, Gaps in Insurance Supervision
- December 8, 2022: Update on Climate-Related Work to Federal Advisory Committee on Insurance
- October 18, 2022: Treasury’s Federal Insurance Office Takes Important Step to Assess Climate-related Financial Risk – Seeks Comment on Proposed Data Call
- February 17, 2022: Treasury’s Federal Insurance Office Continues Efforts on Climate-Related Financial Risks in the Insurance Sector, Joins the NGFS
- August 31, 2021: U.S. Department of the Treasury Launches New Effort on Climate-Related Financial Risks in the Insurance Sector
Other Climate-Related Announcements and Remarks
- May 11, 2023: Treasury Office of State and Local Finance Kicks off Summer Series on Climate Transition
- May 10, 2023: READOUT: Treasury Department Convenes Discussion on Climate-Focused Community Finance
- January 25, 2023: Secretary of the Treasury Janet L. Yellen Announces U.S.-South Africa Task Force to Combat the Financing of Wildlife Trafficking
- December 9, 2022: Treasury Targets Serious Human Rights Abuse Aboard Distant Water Fishing Vessels Based in the People’s Republic of China
- October 7, 2022: Treasury Sanctions Wildlife Trafficking Organized Crime Group
- October 3, 2022: READOUT: U.S. Department of the Treasury Hosts Discussion with Banks on Enhancing the Impact of Net-Zero Finance Commitments
- September 28, 2022: READOUT: U.S. Department of the Treasury and the Office of the U.S. Special Presidential Envoy for Climate (SPEC) Host Discussion with Asset Managers and Insurers on the Opportunities and Challenges of Incorporating Climate Considerations into Investment
- June 7, 2022: READOUT: U.S. Department of the Treasury and the Office of the U.S. Special Presidential Envoy for Climate (SPEC) Host Discussion on Enhancing the Impact of Net-Zero Finance Commitments
- May 17, 2022: Remarks by Climate Counselor John Morton at the MSCI Capital for Climate Action Conference on Treasury’s Efforts to Promote Transparency and Accountability Around Financial Institutions’ Net-Zero Targets
- March 3, 2022: FACT SHEET: Treasury’s Work to Support States, Localities, and Communities in the Climate Transition
- March 3, 2022: READOUT: Virtual Roundtable on State and Local Efforts to Address Climate Change
- March 1, 2022: Treasury Publishes National Risk Assessments for Money Laundering, Terrorist Financing, and Proliferation Financing (see wildlife trafficking section in National Money Laundering Risk Assessment)
- December 20, 2021: FinCEN Analysis Reveals Upward Trend of SARs Related to Wildlife Trafficking
- November 18, 2021: FinCEN Calls Attention to Environmental Crimes and Related Financial Activity
- October 13, 2021: Treasury Launches Effort to Study Impact of Climate Change on Households and Communities
- October 7, 2021: Treasury Releases Climate Action Plan
- April 19, 2021: Treasury Announces Coordinated Climate Policy Strategy with New Treasury Climate Hub and Climate Counselor