WASHINGTON—Treasury Secretary Janet Yellen is reportedly looking to appoint an Obama administration veteran as climate czar at the Treasury Department to lead efforts in assessing the effects of climate change on financial markets as well as pushing tax incentives for renewable energy.
During her Senate confirmation hearing on Jan. 19, Yellen pledged to "appoint someone at a very senior level" to lead the department's climate efforts and to "create a hub" that will solely focus on addressing risks related to climate change.
Yellen made it clear that President Joe Biden's climate agenda would be a major focus of her tenure as Treasury secretary.
Yellen added that she would support using "the tax code to set incentives for businesses and individuals to adopt climate-friendly policies."
In addition, climate change poses a potential systemic risk to the U.S. economy, according to Yellen, who believes that "appropriate processes and regulations" should be adopted to assess and mitigate this risk.
Yellen is expected to push financial institutions to run stress tests on their exposure to climate risk, which may eventually require them to hold more capital to mitigate any effects. Stress testing emerged from the Great Recession as a way to determine whether a bank has enough capital to weather various economic risks.
The Treasury Department didn't immediately respond to a request by The Epoch Times for comment.
The Fed announced in December that it had joined a network of central banks that advocate for using levers of financial regulation to address climate change. The central bank also hired the New York Fed's top bank oversight official to lead its newly created Supervision Climate Committee in Washington, according to The Wall Street Journal.
“The assault by the Biden Administration on the energy industry is a threat to jobs and households energy costs in a time of widespread economic uncertainty," Rep. Andy Barr (R-Ky.) told The Epoch Times in an email. "It is wrong for the Biden Administration to put a radical environmental agenda led by [his top climate advisers] John Kerry and Gina McCarthy ahead of the interests of families in Kentucky and throughout the United States.”
The group urged the central bank "not to entertain implementation of such scenarios" without considering their shortcomings and challenges as they rely on speculation and long-term projections.
U.S. companies are closely monitoring the new administration's climate policies and their impact on earnings. According to FactSet, 28 S&P 500 companies, including large banks, mentioned Biden's climate change and energy policy on their fourth-quarter earnings calls. Of these 28 companies, 17 expressed support for his climate policies and they discussed how they have been adjusting their operations to help reduce carbon and greenhouse gas emissions.
However, four companies expressed concerns about the administration's executive order pausing new oil and gas leases on federal lands.
Jamie Dimon, chairman and CEO of JPMorgan Chase, predicted during the financial services company's earnings call on Jan. 15 that there would be new demands from regulators under the new administration.
"Obviously, we want to satisfy all of our regulators. So I do expect that there’ll be a new set of regulators, they’ll have a new set of demands. Some we agree with. Now we want to do a better job in climate for the world. We want to be more green," Dimon said.