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‘Climate change is an existential risk’

“The Biden administration adapted a whole-of-government approach to aggressively tackle climate change, said US Treasury Secretary Janet Yellen…reports Asian Lite News

US Treasury Secretary Janet Yellen said that her Department will take a “whole-of-economy” approach to tackle the “existential risk” of climate change.

“The Biden administration is taking a whole-of-government approach to aggressively tackle climate change. My goal, at Treasury, is to support this work with a whole-of-economy approach,” Yellen said in remarks to the Institute of International Finance on Wednesday.

“Specifically, we are committed to directing public investment to areas that can facilitate our transition to net-zero and strengthen the functioning of our financial system so that workers, investors, and businesses can seize the opportunity that tackling climate change presents,” she said.

President Joe Biden at Pentagon.(photoInstagram)

Noting that climate change is an “existential risk” to the future economy and way of life, Yellen said that massive investments are needed over the next 10 years to facilitate the transition to net-zero carbon emissions.

“One estimate placed the needed incremental investments at over $2.5 trillion for the US alone. Private capital will need to fill most of that gap,” she said.

“We also recognise the financial sector has an opportunity to play an important role in financing and leading the transition of the global economy to a net-zero economy,” added the Treasury Secretary.

Yellen’s remarks came after the Treasury Department announced on Monday that it was creating a new “Climate Hub” in the department to help coordinate economic policies that address climate change.

“With a view of all Treasury climate initiatives, the Hub will enable Treasury to move nimbly and efficiently in prioritizing climate action,” the Department said.

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Yellen slams Trump on climate responses

“We are seeking to increase the scale of climate finance and use these tools to leverage additional private investment,” said Yellen…reports Asian Lite News

The US is seeking to increase the scale of climate finance and working with the international community to tackle climate change, US Treasury Secretary Janet Yellen said on Tuesday.

“Climate, by its very nature, requires strong global cooperation. We lost four important years, and we recognize that many of you around the room have been leading change in your own countries,” Yellen said at her first meeting with the Coalition of Finance Ministers for Climate Action, adding that the US was pleased to join the coalition last week, the Xinhua news agency reported.

“Finance ministries have a vital role to play, and there is much that we can learn from each other about how to integrate climate into our financial planning and decision-making,” she said.

Yellen said that the US Treasury is working through the US Financial Stability Oversight Council and participating in international forums to understand and mitigate the risks that climate change poses to the stability of the financial system and macroeconomy in the US and across jurisdictions.

Former US President Donald Trump(IANS)

“We are also supporting international efforts to better identify climate-aligned investments and encourage financial institutions to credibly align their portfolios and strategies with the objectives of the Paris Agreement,” she said.

Also read:Biden’s boost for infra, jobs

Meanwhile, the US Treasury is working with the White House, Congress and others to ensure that domestic economic programs and tax policies support US climate goals, including building climate-resilient infrastructure and facilitating a transition to a decarbonised economy, according to Yellen.

“We are seeking to increase the scale of climate finance and use these tools to leverage additional private investment,” she said.

Yellen also said that she is pleased to co-chair the Group of 20’s newly re-established sustainable finance group, which provides an important venue to tackle these issues and promote finance that supports international climate and other sustainability goals.

“Financial market participants that do not put in place frameworks to assess and address climate-related risks could face significant losses on climate-sensitive assets caused by environmental shifts, by a disorderly transition, or both,” Fed governor Lael Brainard said last month.

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Yellen urges minimum corporate tax

“We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” said Yellen..reports Asian Lite News

US Treasury Secretary Janet Yellen on Monday called for a global minimum tax rate on corporations that would provide a more level playing field for all countries.

“We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” Yellen said in prepared remarks for a virtual event hosted by the Chicago Council on Global Affairs, the Xinhua news agency reported.

“Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity,” she said.

Yellen’s remarks came after US President Joe Biden last week proposed a series of corporate tax changes that could raise roughly $2 trillion over 15 years to pay for infrastructure investments in 8 years.

US President Joe Biden

The Biden proposal would increase the US corporate income tax rate to 28 per cent, up from the current 21 per cent, attempting to partially reverse the tax cuts under the Donald Trump administration.

It would also raise the global minimum tax on US multinational corporations from 10.5 per cent to 21 per cent, in a bid to discourage offshoring and create incentives for investment in the US.

Yellen said that the Biden administration wants to end a “thirty-year race to the bottom” on corporate tax rates around the world.

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“It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government,” she said.

Yellen also emphasized that global cooperation is needed to address global challenges such as the Covid-19 pandemic, technological change and climate change, as “no one country will be successful if it goes at it in isolation”.

“Over the last four years, we have seen firsthand what happens when America steps back from the global stage. America first must never mean America alone,” she said.

Yellen’s remarks also came as global financial and central bank officials begin to gather online this week for the spring meetings of the International Monetary Fund and the World Bank.

Yellen said that she would use the spring meetings to advance discussions on climate change, strengthen tools to improve vaccine access and financing for the world’s poorest countries, increase the focus on inequality and support a strong global economic recovery.

Also read:Biden’s boost for infra, jobs

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‘Biden admin mulls corporate tax hike’

The treasury secretary noted that the 1.9-trillion-dollar Covid-19 relief package recently rolled out has been deficit-funded…reports Asian Lite News

US President Joe Biden is considering an increase in the corporate income tax rate, as one of the tax proposals to offset the cost of the upcoming long-term investment plans, Treasury Secretary Janet Yellen said.

“I think a package that consists of investment in people, investments in infrastructure, will help to create the jobs in the American economy and changes to the tax structure will help to pay for those programs,” Yellen said at a hearing before the House Financial Services Committee on Tuesday, Xinhua news agency reported.

The treasury secretary noted that the 1.9-trillion-dollar Covid-19 relief package recently rolled out has been deficit-funded. “The stimulus package, the American Rescue Plan was not funded with any increase in taxes,” she said, adding that a longer-term plan probably would be accompanied with some revenue increases.

The current crisis is due to the pandemic, Yellen said. “But, once the economy is strong again, we are beyond the pandemic, President Biden is likely to propose that we engage in long-term plans to address long-standing investment shortfalls in our economy.”

She noted that investments in infrastructure, climate change, people, research and development, as well as manufacturing will make US economy more productive.

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“This will be spending over a 10-year horizon and would require some additional funding,” she told lawmakers.

One of the tax proposals Biden would consider is to increase corporate income tax rate back to 28 per cent, Yellen said, noting that the current US corporate income tax is among the lowest in developed countries.

US President Joe Biden

An increase in corporate income tax, if enacted, would mark a reversal of policy from the Donald Trump administration. In late 2017, the Republican-controlled Congress passed a President Trump-advocated tax reform bill, which slashed the corporate income tax from 35 per cent to 21 per cent.

At the congressional hearing, some Republican lawmakers, including Representative Ann Wagner from Missouri, cautioned against raising taxes.

“We know that raising the corporate tax rates results in higher costs for small businesses, schools and American households,” Wagner said.

“Why is this country beginning to reopen and recover economically with the Biden administration preparing tax policy which would in the end hurt the American family and millions of struggling small businesses?” she continued.

Yellen, however, told lawmakers that the impact of the changes in corporate taxes have been studied for a long time, and the impact on prices and on consumers are “very unclear” from existing studies.

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