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Top US officials share worries around climate progress, inflation but remain hopeful

Highlights

Inflation no longer seen as 'transitory': Yellen

Blinken optimistic countries can build on COP26 agreements

Kerry sees private sector as crucial to winning climate battle

Top US government officials pointed to significant challenges ahead to get the world on track for a net-zero emissions future and to rein in soaring prices at the pump and elsewhere as inflation no longer looks to be a short-term problem.

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But they also expressed confidence in the efforts the federal government is taking to address these issues and offered a hopeful outlook for the future at the Reuters NEXT virtual global conference, held Dec. 1-3.

"This is very much a work in progress," Secretary of State Antony Blinken said Dec. 3 as the Biden administration nears the end of its first year in office.

And the pandemic is continuing to inject uncertainty into the economy and has proven to be a significant contributor to the inflation problem, Treasury Secretary Janet Yellen said at the conference Dec. 2.

While she remained hopeful that the coronavirus would not again "completely stifle economic activity," she said it would likely "affect our behavior in ways that contribute to inflation." She added that it was time to "retire the word 'transitory'" when discussing the current slate of inflation issues.

"The White House is totally focused on supply chain problems [and] is doing absolutely everything that we can constructively think of to do to coordinate private sector activity to mitigate the problems," Yellen said. But the omicron variant "could again exacerbate supply chain and inflation problems. It could depress demand and cause slower growth, which would impact inflation the other way."

Engagement, leadership

But Blinken highlighted the US' reemergence as a leader on the global stage as a positive development for tackling the numerous challenges before the country.

"The first and most important thing that we've done over these last 10 months is we put back in place the foundation for American engagement and American leadership, revitalizing alliances, revitalizing partnerships, reengaging in the multilateral system," he said.

Blinken pointed to the US rejoining the Paris Climate Agreement as among the actions taken as "a means to the ends that we all are seeking to achieve."

He asserted that addressing global problems like climate change that have an impact on people's lives will require coordination and cooperation with other countries to converge on ways to deal with these challenges.

The 26th UN Climate Change Conference ultimately failed to mobilize sufficient climate funds for developing countries and did not dial down projections of fossil fuel demand in emerging markets. But pledges against coal and methane and agreements on cross-border carbon trading were viewed as small wins in a bigger battle.

Blinken acknowledged that there is "a lot more to be done" following COP26, but he was optimistic that countries could build on the agreements that were made at the meeting.

If China were to sign on to the methane pledge to cut emissions 30% by 2030, for instance, he said that would "be the equivalent of taking every plane out of the skies, every ship off the seas in terms of emissions."

He contended that the 65% of global GDP that made commitments consistent with keeping global warming contained to 1.5 Celsius did not do so accidentally. "That happened because the US re-engaged," he said.

'Have to step up'

US Special Presidential Envoy for Climate John Kerry said he was concerned about countries like China, Russia, Brazil, and others whose climate goals fall short of the 1.5 C target.

"You have ... a group of countries that are going to have to step up and we have to help them," Kerry said during Dec. 1 remarks at the conference. "This is not just an unloaded responsibility on them. The task now is to implement all of the agreements which were reached in Glasgow that can advance the process."

Kerry's worries about the world's ability to contain temperature rise, he said, are partly due to the massive forces arrayed in some cases against the effort and the time it takes for a ship to change direction even after turning the wheel.

"In the end, no government on the planet has enough money to affect this transition," Kerry said. "But, the private sector does have that money ... and I believe the private sector has the ability to win this battle for us."

He added that the transition underway in the private sector is not something that any politician could reverse. He pointed to shareholder debates demanding greater attention on sustainability, a new climate focus in financial disclosures, and technology advances that have allowed for more transparency and accountability on decarbonization efforts.

Kerry stressed that a net-zero path is doable and doesn't have to be frightening or overhaul the way people live their lives. "We can have a better quality of life doing these things that we need to do, having smart grids, managing energy better, cleaning up pollution."