US Treasury Secretary Janet Yellen stressed on Thursday that the World Bank – whose president, David Malpass, has been on the defensive about his views on climate change – must play a leadership role in the global transition to clean energy.
The White House condemned Malpass’s comments last month after he declined to say he supported the scientific consensus on climate change, although he later apologized and reiterated his view that human activity contributes to climate change.
In her joint statement to the steering committees of the World Bank and International Monetary Fund, Yellen said the World Bank should provide sound analysis to inform countries of climate-related macroeconomic risks and more effectively convene and finance countries efforts to advance climate goals.
Yellen welcomed the World Bank’s introduction of Country Climate and Development Reports, which will help countries define and move their climate agendas forward, and the fact that it was exceeding its 35% climate finance target.
Must Do More
But she said the World Bank should do more to help mobilize private capital to work on solutions focused on high-quality sustainable infrastructure.
Malpass, a Trump-era nominee who has faced pointed questions and even catcalls during this week’s annual meetings of the World Bank and IMF, has defended the institution’s commitment to tackling climate change throughout the week.
Many civil society groups are pushing for his replacement at the helm of the bank before his term expires in April 2024.
Dozens of protesters thronged outside the headquarters of the World Bank and the IMF on Thursday, with some using noisemakers and air horns to call on the World Bank to do more to fight climate change.
The US Treasury secretary also reiterated her push for World Bank Group and other multilateral development banks to revamp their business models and dramatically boost lending to address pressing global needs such as climate change.
Yellen asked World Bank management to develop a roadmap for changes by the end of the year, including proposals to harness more private capital and use more concessional loans and grants to fund investments that more broadly benefit the world, such as helping countries transition away from coal power.
“The global community has a responsibility to help fund action where the benefits are global. It cannot rely only on developing countries to borrow at usual rates to fund these activities,” she said in the statement.
Yellen encouraged the bank to draw from an independent review of capital adequacy frameworks commissioned by the Group of 20 major economies and released in July, which she said would “help safeguard the WBG’s long-term financial sustainability, robust credit ratings, and preferred creditor status.”
- Reuters with additional editing by Jim Pollard