President Joe Biden’s pledge to tackle the threat of climate change now has the power of the federal government’s purse behind it.
Establishing a new “climate hub” to coordinate climate-related activities within the Department of the Treasury, the department on Monday said the ultimate goal is to create an economy with net-zero carbon emissions both in the U.S. and abroad. A former Obama administration official, John Morton, will lead the department’s climate change strategy with the new title of climate counselor.
The Treasury Department will focus on climate-related economic and tax policy, the financial risks associated with climate change, and the financial aspects of transitioning away from fossil fuels. The Treasury will look to leverage its resources to support investment in green technology and jobs, climate-resilient infrastructure, and environmental justice for communities hard hit by climate change, it said in a statement.
While the Treasury might not seem a natural fit for environmental policy, Treasury Secretary Janet Yellen has said climate change is “an existential threat” to the economy that she plans on addressing. During a call with environmental organizations last week, Yellen hinted at how she might approach the issue, saying the U.S. must use “all the tools at our disposal,” including altering the tax code, in order to discourage carbon emissions.
Carbon dioxide is one of the primary drivers of climate change, and economists have projected that by 2025, climate change could cause $1.7 trillion per year in economic damage if no action is taken to limit emissions.
“The steep consequences of our actions demand that the Treasury Department make climate change a top priority,“ Yellen said in the statement.
Morton, who previously coordinated climate policy for former President Barack Obama, will report directly to Yellen.
Monday’s announcement starts a climate-focused week in Washington. Biden is expected to announce a new 2030 emissions target for the U.S. in the coming days, another step in the process of rejoining the Paris Agreement, an international climate accord. On Thursday and Friday, he will host a virtual summit with 40 world leaders.