US senators blast Treasury's 'lack of progress' on climate risks

Three US senators blasted the Treasury Department on Thursday for what they called its failure to act more swiftly on countering climate risks, and they urged Secretary Janet Yellen to appoint a new climate counselor to lead the effort.

In a letter to Yellen viewed by Reuters, Democratic Senators Elizabeth Warren, Sheldon Whitehouse and Edward Markey criticized the work done by John Morton, Yellen's first climate counselor. Morton stepped down in December and returned to the private sector.

 

The senators said nearly two years had passed since Treasury created a "Climate Hub" and named Morton to coordinate its strategies, but the results have been disappointing.

Yellen has not yet named a replacement for Morton, although Treasury has dozens of people working on climate-related issues, including some in key senior positions.

Treasury spokesperson Julia Krieger underscored the key role the department and the Climate Hub had played on climate issues, including through passage of the Inflation Reduction Act's clean energy tax incentives, its work to better understand climate-related financial risks and international efforts.

 

"Treasury has been central to delivering on the Biden Administration’s climate agenda," she said, when asked about the senators' letter. "The Climate Hub has played a critical role coordinating this overall agenda and providing expertise to support climate-related policy development and implementation."

A second Treasury official said the criticism of Morton was frustrating, given his leadership on key initiatives, including $279 billion in clean energy tax credits under the IRA and in mobilizing capital for climate-friendly energy transitions around the world.

 

In their letter, the senators also faulted Treasury's leadership of climate work by the Financial Stability Oversight Council, which identified climate change as an "emerging and increasing threat to US financial stability" in October 2021.

The second Treasury official, who was not authorized to speak publicly, said the independent agencies grouped under FSOC were taking action, but those steps followed prescribed processes. No Treasury climate counselor could speed up that work since the agencies were independent, the official said.

The senators also said Treasury had failed to use its power as the largest shareholder in the International Monetary Fund to halt lending that enabled fossil fuel expansion in other countries, noting that other countries were moving faster.

They asked Yellen to respond to over a dozen questions on Treasury's efforts to mitigate risks to the US economy posed by accelerating climate change and a timeline for doing so.

Yellen this week told an advisory panel climate change was already having a major economic and financial impact on the United States and may trigger asset value losses in coming years that could cascade through the US financial system.