Yellen urges China to support existing institutions to fight climate change

BEIJING – The United States and China, as the world’s two largest economies, must work together to combat the existential threat of climate change, US Treasury Secretary Janet Yellen told Chinese government officials and climate experts on Saturday.

During a visit to Beijing,

Dr Yellen said previous cooperation on climate change between the US and China has made possible global breakthroughs such as the 2015 Paris Agreement, adding that both governments want to support emerging markets and developing countries as they strive to meet their climate goals.

“Continued US-China cooperation on climate finance is critical,” Dr Yellen said in a prepared text at a climate round-table discussion in Beijing.

“As the world’s two largest emitters of greenhouse gases and the largest investors in renewable energy, we have both a joint responsibility – and ability – to lead the way.”

China, classified as a developing country by the United Nations, has long said it is the responsibility of developed nations to help poor countries pay to address climate change. However, Beijing says it could contribute to “loss and damage” due to climate change on a voluntary basis.

Given their scale, cooperation between the US and China is considered vital to international efforts to avert the worst impacts of climate change.

Dr Yellen said financing for such initiatives should be coordinated efficiently and effectively, adding that Beijing’s support for existing multilateral climate institutions like the Green Climate Fund (GCF) and the Climate Investment Funds, alongside Washington and others, could boost their impact.

China is welcome to join the US in contributing to a round of fund pledging for the GCF in September, said a US Treasury official.

For that fund replenishment, President Joe Biden said earlier this year that the US will provide a further US$1 billion (S$1.35 billion).

Climate envoy

The GCF is a fund under the UN Framework Convention on Climate Change, which helps developing countries with adaptation and mitigation practices to tackle climate change.

In 2022, China briefly suspended talks with the US on climate, security and other areas in response to a visit to Taiwan by then US House Speaker Nancy Pelosi.

Also speaking at the round-table, US Ambassador to China Nicholas Burns said he is looking forward to a visit by US climate envoy John Kerry. Mr Kerry has said China had invited him to visit soon.

Dr Yellen also noted the Summit for a New Global Financing Pact in Paris in June, where she was pleased to join leaders from around the world, including Premier Li Qiang, according to a statement from the US Treasury Department.

At the summit, Mr Li had said China is ready to work with other countries to forge a global partnership for clean energy cooperation under the principles of mutual benefit and common, but differentiated, responsibilities.

Funding needs

China is the largest market after Europe for climate funds, surpassing the US, as funds in China have more than doubled since 2021 to US$46.7 billion, according to research firm Morningstar.

But the World Bank has said that China needs up to US$17 trillion in additional investment for green infrastructure and technology in the power and transport sectors to reach its target of net-zero carbon emissions by 2060, underscoring the need for private investment.

“It is also critical that we encourage economy-wide transitions towards net zero, which need to include the private sector,” Dr Yellen said.

She also said she looks forward to hearing recommendations from working groups at the upcoming Group of 20 finance ministers meeting in India, including the Sustainable Finance Working Group, which the US and China co-chair.

The group has in recent years developed a road map for sustainable finance, held workshops on carbon pricing and non-pricing policy levers, developed a transition finance framework, and made a range of recommendations on climate finance, she said. “This is a good of example of what our bilateral cooperation can achieve – and we should build on it in multilateral forums.” REUTERS