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Yellen Urges China to Step Up Climate Finance Investments


The Biden administration called on China on Saturday to do more to help developing countries combat climate change, urging the world’s largest emitter of greenhouse gases to back international climate finance funds that it has so far declined to support.

Treasury Secretary Janet L. Yellen delivered the message during her second day of meetings in Beijing, where she is seeking to cultivate areas of cooperation between the United States and China. While China has expressed support for programs to help poor countries cope with the effects of climate change, it has resisted paying into such funds, arguing that it is also a developing nation.

Ms. Yellen said that China, like the United States, has a responsibility to be a climate finance leader.

“Climate finance should be targeted efficiently and effectively,” Ms. Yellen said during a meeting with a group of Chinese and international sustainable finance experts on Saturday morning. “I believe that if China were to support existing multilateral climate institutions like the Green Climate Fund and the Climate Investment Funds alongside us and other donor governments, we could have a greater impact than we do today.”

The United States and China are both facing pressure from developing countries to mobilize more money for such countries struggling to shut down coal plants, develop renewable energy, or cope with the consequences of climate change by building things like sea walls, improving drainage or developing early warning systems for floods and cyclones.

Under President Barack Obama, the United States pledged $3 billion over four years to the Green Climate Fund, a United Nations-led program aimed at helping poor countries. So far it has delivered $2 billion of that pledge. Republicans have sought several times to block taxpayer spending for the fund and other climate finance, but President Biden has used discretionary spending within the State Department to fulfill part of the U.S. pledge.

China pledged $3.1 billion, and it has delivered about 10 percent of that, according to studies. It also gives money to developing nations through what its leaders call “South-South” cooperation. That’s because under the United Nations climate body, China is still considered a developing country and not an industrialized nation, although China now has a far larger manufacturing sector than any other country. It has long resisted pressure to contribute to the same climate funds as wealthy nations, arguing that advanced economies like the United States have been polluting far longer and have more responsibility to help tackle climate change.

“It is not the obligation of China to provide financial support” under the U.N. climate rules, Xie Zhenhua, China’s climate envoy, said in an interview last year after the creation of a new multilateral fund to help poor countries address economic losses from climate disasters.

John Morton, a former climate counselor for the Treasury Department under the Biden administration, said any meaningful contribution by China could help the United States. make the case to members of Congress and others to approve climate finance. He also said there may be other ways the two superpowers could work together to help developing nations slash coal use or curb methane, a potent greenhouse gas that leaks from oil and gas wells.

“That would be hugely consequential for the world,” he said. “Any time there’s an opportunity to forge a closer relationship with China on climate, it is an opportunity that should be taken up immediately.”

The U.S. and China are joint leaders of the Sustainable Finance Working Group at the Group of 20, providing the two countries an opportunity to work more closely on global climate matters.

Ms. Yellen is the second Biden administration cabinet member to travel to China in recent weeks; Secretary of State Antony J. Blinken was there in June. Later in July, John Kerry, President Biden’s special envoy for climate change, will visit to restart global warming negotiations between the world’s two largest polluters.

Additionally, President Biden will attend a forum in London on Tuesday aimed at finding ways of mobilizing climate finance, in particular “bringing private finance off the sidelines, for clean energy deployment and adaptation in developing countries,” Jake Sullivan, the White House national security adviser, said on Friday.

During her four-day trip to China, Ms. Yellen has been looking to reopen the channels of communication with her counterparts in Beijing after years of growing distrust that have been amplified by trade wars and export controls for sensitive technology. In meetings this week, Ms. Yellen criticized China’s treatment of foreign businesses but also made the case that more frequent conversations between top officials would help prevent policy misunderstandings from festering.

The Treasury secretary also discussed climate finance in a meeting with Premier Li Qiang on Friday in Beijing. On Saturday afternoon she is scheduled to meet with Vice Premier He Lifeng, her counterpart who oversees China’s economy.

In the past two years, China has been building more coal-fired power plants and expanding coal mines, prompting concern in Washington.

Chinese officials have said they plan to phase out carbon emissions completely by 2060, starting no later than 2030. And China has led the world in installing solar power, and in exporting solar panels to other countries.

China is doubling down on coal consumption partly for national security reasons — it does not want to rely more heavily on imported oil and natural gas, which might be cut off during a crisis.

China’s power experts say that the new coal-fired power plants will be used mainly during peaks in electricity demand, not around the clock. But critics say that once built, the plants will inevitably damage the climate over the long term.



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