Groups Issue Bold Demands for Biden Officials Crafting New Climate Finance Strategy

In the wake of a highly anticipated United Nations report about humanity's ongoing destruction of the planet, scores of advocacy groups on Tuesday detailed their demands for the forthcoming climate finance plans that President Joe Biden ordered top U.S. officials to develop by next month.

"The administration has a suite of existing authorities that allow it to take the decisive and necessary steps to mitigate further climate chaos and support the most vulnerable communities."
--STMP letter

The open letter from more than 80 members of the Stop the Money Pipeline (STMP) coalition and allies, sent to four key figures in the Biden administration, focuses on the second section of the president's May 20 Executive Order (E.O.) on Climate-Related Financial Risk.

That section requires National Economic Council Director Brian Deese, National Climate Adviser Gina McCarthy, Treasury Secretary Janet Yellen, and Office of Management and Budget Director Sholanda Young to come up with a government-wide strategy that addresses climate financial risk to federal programs and financing the transition to a net-zero economy.

"While many aspects of necessary climate adaptation and mitigation require legislation," the letter explains, "financial policy and regulation is one area in which the administration has a suite of existing authorities that allow it to take the decisive and necessary steps to mitigate further climate chaos and support the most vulnerable communities in addressing the already-locked-in impacts of climate change."

"In line with its commitments to take a whole-of-government approach to addressing the climate crisis," the letter adds, "the administration must use these authorities to their full extent, including in the areas of government spending, priority-setting for federal programs, and regulation of financial actors."

The groups' recommendations are sorted by the three directives included in the relevant section of Biden's EO. The first was to develop a strategy regarding "the measurement, assessment, mitigation, and disclosure of climate-related financial risk to federal government programs, assets, and liabilities in order to increase the long-term stability of federal operations."

The letter calls for declaring a climate emergency; adopting a "precautionary approach" to managing climate-related financial risk; requiring agencies to disclose how government assets and liabilities impact biodiversity, the climate, forest clearance, and Indigenous land rights; and making clear that no public money should go to fossil fuel companies or those causing "deforestation, natural land conversion, or peatland destruction."

Noting the lower temperature goal of the Paris agreement--which the new U.N. report reveals is at serious risk due to the inadequacy of global climate action--Biden also directed the four officials to make plans for "financing needs associated with achieving net-zero greenhouse gas emissions for the U.S. economy by no later than 2050, limiting global average temperature rise to 1.5 degrees Celsius, and adapting to the acute and chronic impacts of climate change."

On this front, the groups recommend fully respecting Indigenous treaty and sovereignty rights; clearly defining that "net zero must mean, as is consistent with science-based targets, rapid phaseout of fossil fuels and deforestation" while recognizing that forest offsets, carbon capture and storage technologies, and removal and trade schemes don't make up for cutting emissions; investing in frontline communities to address past, ongoing, and future harms; and halting all existing and future approvals for fossil fuel infrastructure and operations.

The president also ordered the officials to identify "areas in which private and public investments can play complementary roles in meeting these financing needs--while advancing economic opportunity, worker empowerment, and environmental mitigation, especially in disadvantaged communities and communities of color."

The organizations suggest aligning investments to "promote a green, just economy without new fossil fuel infrastructure," while reiterating their positions on respect for Indigenous rights as well as the definition of net zero and industry claims about compensating for pollution.

The groups further call for ensuring that spending is "prioritized for Black, Brown, and Indigenous communities, and that such investments serve to remedy past harms and promote a clean, resilient, just transition for workers in the fossil fuel sector and frontline communities."

"The latest IPCC report released this week should light a fire under the feet of this administration to treat climate change like the grave emergency that it is."
--Steven Feit, CIEL

The letter follows not only the Monday release of the Intergovernmental Panel on Climate Change (IPCC) report on the physical science of the human-caused global emergency, but also the International Energy Agency's May roadmap for the next three decades, which said there is "no need for investment in new fossil fuel supply in our net-zero pathway."

Moira Birss, climate and finance director of Amazon Watch, one of the groups behind the letter, said in a statement Tuesday that "with its climate-finance executive order, the Biden administration began catching up with frontline communities, climate advocates, the IPCC, and even the IEA in recognizing that investments in the industries causing climate change are catastrophic for people and the planet."

"But issuing plans to make plans doesn't match the urgency of the climate crisis," Birss added, "which is why we are saying loud and clear that the administration must do everything in its power to ensure the drastic reduction of greenhouse gas emissions by public and private actors in ways that promote climate, racial, and economic justice."

Steven Feit, senior attorney at the Center for International Environmental Law (CIEL), also noted the U.N. panel's latest findings, declaring that "the latest IPCC report released this week should light a fire under the feet of this administration to treat climate change like the grave emergency that it is and to take urgent action across the board to drastically reduce emissions."

"That includes confronting how financing for fossil fuel production drives climate chaos," Feit said. "President Biden's Executive Order on Climate-Related Financial Risk provides a critical opportunity to ensure that the financial system is protected from, and protective of, the climate--but only if the administration makes clear that finance cannot be 'net zero' unless finance is fossil-free."