Yellen Offers to Weigh Financial Risk of Climate Change Response

Treasury Secretary Janet Yellen said she’ll try to “better understand” the financial risks of taking steps to combat climate change, while expressing support for President Joe Biden’s decision to cancel the Keystone XL Pipeline.

Yellen, as part of written responses to questions from senators, stopped short of saying that the government’s move to halt the oil project rendered it a stranded asset that could pose financial stability risks.

Yellen Offers to Weigh Financial Risk of Climate Change Response

“The pipeline’s significance for energy security and economy is limited,” Yellen said in her response to follow-up questions from Senator Chuck Grassley that were posted on the Senate Finance Committee website. “The revocation for the permit for the Keystone XL Pipeline may negatively impact some investors in the project, however, the continued development of the pipeline would have created environmental risks.”

Grassley, an Iowa Republican, had asked Yellen if “unanticipated” actions by the federal government to shut down projects present a larger risk than the one posed by climate change.

Yellen, who won Senate confirmation on Monday, said she would take steps to “better understand the physical and transition risks of climate change to our economy.”

Yellen Offers to Weigh Financial Risk of Climate Change Response

Biden canceled TC Energy Corp.’s permit for the cross-border project within hours of taking office on Jan. 20. The move brings Keystone’s fate full circle, repeating a decision made in 2015 by President Barack Obama to prevent the pipeline from crossing into the U.S. from Canada. President Donald Trump reversed that decision in 2017 over the objections of environmental groups.

TC Energy has said that Biden’s decision would lead to the loss of thousands of jobs.

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