Yellen urges China to support existing institutions to fight climate change

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

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“Continued US-China cooperation on climate finance is critical,” Yellen said in a prepared text. “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.”

She 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 and the Climate Investment Funds, alongside the Washington and others, could boost their impact.

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

But the World Bank said last year China needs up to $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 toward net-zero, which needs to include the private sector,” Yellen said, echoing that call, adding it was imperative to that climate-aligned investment be “interoperable” with both the US and Chinese economic systems.

Yellen said she looked forward to hearing recommendations from working groups at the upcoming Group of 20 finance ministers meetings in India, including the Sustainable Finance Working Group, which the United States and China co-chair.

That group had in recent years developed a roadmap 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,” she said.

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