As Prepared for Delivery
BEIJING – Last December, we reached an historic agreement in Paris to move the world towards a lower-carbon future. This year, as the United States, China, and the rest of the world bring the Paris Agreement into force, we face new opportunities and challenges in implementing the agreement.
Climate change will have significant economic impacts, and the economic costs are not limited to one sector of our economies. It threatens agricultural productivity, transportation infrastructure and power grids, and drives up the incidence of costly health care problems.
For these reasons, taking action to address climate change today is critical from an economic perspective. If we fail to address the challenge of climate change now, we will be forced to take more drastic and more costly action down the road, with more damage to our planet as a collateral expense. The only sensible path forward is to strive to make gradual changes now, and in the process create jobs, reduce business and household expenses, and drive innovation, technology, and new industries.
We will be most effective if we use market forces that balance the cost of reducing emissions with what the latest science tells us we need to do to keep temperature increases below dangerous levels. The alternative—allowing greenhouse gas emissions to climb to increasingly dangerous levels—just escalates the damage and expense of dealing with the challenge in the future, and will require more expensive and more difficult action later.
To meet our global climate goals we will need to mobilize climate finance so countries can pursue low-carbon, resilient development. We can only reach the unprecedented levels of funding needed for climate financing by using a variety of channels, including development finance institutions, direct bilateral assistance, the multilateral development banks, and new funds, such as the Green Climate Fund and China’s South-South Climate Cooperation Fund. These limited public resources must leverage larger amounts of private-sector capital for adaptation and mitigation activities, and we are now well on our way to meeting the goal of jointly mobilizing $100 billion per year by 2020 from all sources to address developing country needs in the context of meaningful mitigation actions.
However, supporting low-carbon investments alone is not sufficient. We must also reduce financing for high-carbon projects, particularly subcritical coal-fired power generation, and take advantage of increasingly cost-effective, low-carbon alternatives. It makes little sense to cut carbon emissions at home by greening our power sector only to subsidize the construction of high-emissions facilities elsewhere in the world. It is like trying to fill a bucket with water that is riddled with holes – it cannot work. Climate change affects us all, regardless of where the emissions come from, which is why we need to work together to address the challenges globally. This is why the United States and China are leading by example -- working towards strictly controlling public investment that flows into projects that generate large amounts of pollution and carbon emissions -- both domestically and internationally.
The United States and China have a robust cooperation around all of these issues, which have been an important part of the year’s Strategic and Economic Dialogue. In addition, this year we have worked closely with China on the valuable new green finance work the Chinese launched during their G-20 Presidency. With the leadership of the People’s Bank of China and the Bank of England, we are identifying both challenges to increasing green finance activities and opportunities to address those challenges with innovative solutions. We look forward to continuing this joint effort, recognizing the important role our countries play in leading the transition to a low-carbon future.
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