June 6, 2023
Finance International

Yellen grilled by Republicans on climate finance of the World Bank.

Yellen grilled by Republicans on climate finance of the World Bank.

U.S. Treasury Secretary Janet Yellen testified in Congress on Wednesday about the department’s budget for the upcoming fiscal year, facing pressure from Republicans on proposed increases to climate spending and World Bank reform. The Treasury Department’s international budget request seeks an increase from $2.3 billion approved for 2023 to $4 billion for multilateral institutions and funds. Congressman Mario Díaz-Balart, a Republican from Florida and chair of the appropriations subcommittee, criticized the proposed spending as an unjustifiable “extraordinary level of spending.”

During the hearing, Yellen stressed the urgent need to address climate change as an “existential threat.” However, Díaz-Balart expressed concerns about corruption and poor “value for money” in international climate projects. He also blasted what he described as a “really dramatic 416% increase in climate funding” proposed in the Treasury Department’s budget request.

Díaz-Balart further argued that Yellen’s push for World Bank reform to prioritize climate action would negatively impact U.S. national security. He claimed that it would be a “real wrapped-in-a-bow gift to China” since Beijing could gain influence by funding fossil projects that the World Bank would not support.

The World Bank is a major international financial institution, and the U.S. is the largest shareholder in the organization. Yellen had previously stated her intention to use her role as the U.S. governor of the bank to push for reforms, including directing more of the bank’s funding towards climate change mitigation and adaptation projects.

Overall, Yellen’s testimony reflected the ongoing debates and tensions between Democrats and Republicans over climate change, international climate financing, and the role of multilateral institutions like the World Bank.

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