By Paul Kiernan
WASHINGTON -- The Treasury Department appointed a senior
official on Monday to a new post coordinating wide-ranging efforts
to fight climate change through economic and tax policies.
John E. Morton, a former adviser to the Obama administration,
will lead a newly formed climate hub, the Treasury said. He will
report directly to Treasury Secretary Janet Yellen and focus on
financing for investments needed to reduce carbon emissions.
The move is part of the Biden administration's effort to address
climate change and its impact on various industries. Gary Gensler,
the newly confirmed chairman of the Securities and Exchange
Commission, is expected to require more disclosure from public
companies on the potential impact of climate change on their
The Treasury Department and Federal Reserve have said they want
to better understand risks to financial stability and the economy
emanating from climate change.
In a March 19 paper, Federal Reserve economists said that
climate-related hazards, such as more-frequent storms, floods, or
wildfires, can quickly change the value of financial assets and
affect the availability of credit. Even slow-moving events, like
rising sea levels, could cause abrupt changes in investor
sentiment, they said.
In addition, government policies to curb climate change -- for
instance, by reducing carbon emissions -- can affect the market
value of assets such as oil refineries, a phenomenon known as
"Both the impact of climate change itself and policies to
address it could have major impacts, creating stranded assets,
generating large changes in asset prices, credit risks and so forth
that could affect the financial system," Ms. Yellen said at her
confirmation hearing in January. "These are very real risks."
Biden administration officials have said they plan to unveil a
new U.S. target for emissions reductions in the run-up to a
climate-change summit in Washington this week. The administration
is expected to set a goal for reducing U.S. emissions over the next
Climate is also a central focus of President Biden's $2.3
trillion infrastructure plan. The proposal includes $174 billion
for investments in electric vehicles, offering tax incentives to
consumers to buy the vehicles and proposing new grant and incentive
programs to build 500,000 electrical-vehicle chargers by 2030.
Ms. Yellen has made countering climate change a major policy
thrust for the Treasury Department. That represents a departure for
the Treasury, which in the past hasn't explicitly focused on the
"Finance and financial incentives will play a crucial role in
addressing the climate crisis at home and abroad and in providing
capital for opportunities to transform the economy," Ms. Yellen
said in a statement on Monday.
Mr. Morton, whose title is climate counselor, served as senior
director for energy and climate in the National Security Council
during President Obama's final year in office and has since worked
as a consultant on climate-related finance. He was most recently a
partner at Pollination, a climate-change advisory and investment
firm, according to the Treasury.
Following Treasury's announcement Monday, several progressive
groups criticized the appointment of Mr. Morton.
"It is disappointing...that the Treasury has appointed someone
who lacks experience with financial regulation or a history of
using regulatory tools to drive change," Public Citizen, a
Washington-based consumer advocacy group, said in a statement.
In February, 147 organizations including Public Citizen, Amnesty
International, the Sierra Club and the Union of Concerned
Scientists signed a letter to Ms. Yellen urging her to pick
"someone with deep regulatory experience and experience at the
Federal Reserve and Treasury Department" to lead the climate
The Wall Street Journal previously reported that the Treasury
was looking to Sarah Bloom Raskin, who has held senior positions at
both the Fed and the Treasury, as a leading contender for the
While the Treasury Department doesn't directly supervise or
regulate banks or markets, it helps steer the regulatory agenda and
monitors risks to the financial system. Ms. Yellen heads the
Financial Stability Oversight Council, a panel of regulators that
also includes the Fed, the SEC and the Commodity Futures Trading
The Treasury Department's focus on climate change will also
factor into tax policy and international financial diplomacy. The
department will play a key role coordinating on climate issues with
global counterparts through the Group of Seven and G-20 groups of
The new push comes as some major financial firms have taken
steps in recent years to reduce their exposure to what they
considered the worst climate offenders. JPMorgan Chase & Co.
and other international banks have also committed to aim their
financing in ways that help the world meet the goals of the Paris
accord on reducing greenhouse-gas emissions.
The Federal Reserve has created a committee to study the
implications of climate change for financial institutions and
infrastructure. Ms. Yellen has floated the idea of so-called stress
tests to test banks' resilience to climate-related risks. Sen. Pat
Toomey (R., Pa.) has said he was concerned regulators could use
climate stress tests to keep banks from lending to the oil-and-gas
Write to Paul Kiernan at email@example.com
(END) Dow Jones Newswires
April 19, 2021 17:51 ET (21:51 GMT)
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