Remarks by Secretary of the Treasury Janet L. Yellen on Extreme Heat Financing

As Prepared for Delivery

Good morning. I’m glad to be co-hosting this event with Administrator Power. Thank you, Samantha, for moderating. I’m also glad to have Senior Advisor Podesta joining us. And thank you to the development partners attending for accepting our invitation. 

Extreme weather events, including heat waves, continue to become increasingly severe and frequent, from the East Coast of the United States to India. Mitigating and responding to these events, and addressing climate change more generally, is a key priority for the Treasury Department. And collaborating with the multilateral development banks has been at the heart of our approach from the outset.  

Not long after I became Treasury Secretary, I met with you, leaders of the MDBs, to discuss increasing climate ambition. We met again in advance of COP27 to focus on how to scale financing for climate adaptation. And then, in 2023, I called on you to evolve the MDBs’ visions, incentive structures, operational approaches, and financial capacity to become better equipped to meet 21^st-century global challenges, including climate change.  

I am very proud of the progress we have collectively made since then.

The OECD found that in 2022, developed countries met our goal of mobilizing $100 billion annually to help developing countries address climate change, mobilizing a record $115.9 billion. MDBs contributed 40 percent of that amount. I’d like to congratulate you and all your staff on this performance. And I’d like to further recognize your leadership by mentioning several other recent achievements. 

The African Development Bank, in partnership with Africa50 and the African Union, established the Alliance for Green Infrastructure in Africa—an innovative financial mechanism that aims to mobilize $10 billion to help support a bankable portfolio of transformative green infrastructure projects. 

The Asian Development Bank committed its highest-ever level of climate finance in 2023, making significant climate investments in critical sectors, including agriculture, energy, and resilient transport—and also launched the Innovative Finance Facility for Climate in Asia and the Pacific.

The European Development Bank tackled challenges associated with the energy performance of buildings—developing local-bank credit lines to provide financing for energy-saving measures and working with governments to enable greater private-sector financing for building energy efficiency.

The Inter-American Development Bank launched the 2024-2025 Natural Capital and Biodiversity Mainstreaming Action Plan—a major step to harness nature to support economic, social, and climate-smart development. 

And at the World Bank, 96 percent of projects had a climate financing component in 2023, showcasing deep commitment to mainstreaming climate change in operations.

But we all know that we have much more work to do, so I’d like to briefly highlight a few areas of focus going forward. 

First, we need to make sure we have our eyes not only on dollars out the door but on the outcomes that change lives, from people protected from heat to carbon emissions reduced. Setting and reaching specific targets is key, and I applaud the MDB effort to collaborate on developing outcome metrics ahead of COP29. We encourage measuring the benefits of specific interventions, not just global or national outcomes, and support effectively screening all projects for cost-effective climate smart interventions and benefits. With 2023 marking the hottest year on record and the 10 hottest years all falling in the past decade, MDBs should especially consider tracking indicators that assess resilience and adaptation to temperature increases. 

Second, private capital mobilization for development- and climate-aligned investments must remain a top priority. We know we cannot meet our shared development goals with public money alone: We must crowd-in private investment at scale with incentives for ambitious targets, innovative financing tools, and transparent reporting. I congratulate the World Bank for recently making private capital mobilization part of its new scorecard for evaluating all its projects and for launching the World Bank Guarantees Platform, which will facilitate lower-cost, longer-duration private financing flows. 

Third, let me emphasize the critical role of IDA and the Green Climate Fund in financing adaptation in vulnerable countries and express my strong support for the ongoing review of the four major multilateral climate funds. 

I am optimistic that these and other steps will result in MDBs that are better, bigger, and more effective in achieving the intertwined goals of reducing poverty, accelerating sustainable and inclusive growth, and addressing global challenges like climate change. And I very much look forward to continuing to advance our collective work, including through today’s focus on extreme heat and resilience. Thank you again for joining.

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