Climate Change

"Climate Change: It is a crisis where no one is immune and everyone has a responsibility to act. [...] Dealing with climate change requires not only mitigating damage, but also adapting for the future. Adaptation is about many things, but it is mostly about pricing risk and providing incentives for investment, including in new technologies."

–Kristalina Georgieva, IMF Managing Director


Can Central Banks Fight Climate Change?

The financial stability risks associated with climate change are high—particularly for countries at the “front-lines”. Panelists discussed how central banks can adjust their regulatory and monetary policy frameworks to deal with the uncertainties associated with climate change and ensure an orderly transition to a green economy.

Moderator Gillian Tett, US Managing Editor, Financial Times

Speakers: Kristalina Georgieva, Managing Director, International Monetary Fund

Philip Lane, Chief Economist, European Central Bank

Sabine Mauderer, Member of the Executive Board, Deutsche Bundesbank

Shamshad Akhtar, former Under-Secretary-General of the UN and former governor of the Central Bank of Pakistan

Key Points:

Implications for central banks. Central banks are increasingly integrating climate-related risks into financial stability monitoring and micro-supervision. As Lane noted, the adjustment needed for the transition to low carbon sources will have a substantial impact on prices, and carbon-intensive industries, and needs to be managed to mitigate risks to the financial sector. Financial market participants are beginning to reprice climate-related risks, in light of regulations to reduce greenhouse emissions, but this can be a difficult in the absence of strong data. In this regard, panelists stressed that the data gap remains a big challenge for green finance. 

Climate policy and coordination. As Lane and Mauderer noted, central banks cannot substitute for an adequate climate policy; developing a coherent set of global standards is priority, requiring international cooperation on issues ranging from developing more harmonized disclosure standards to coordinating macroprudential and regulatory policies. Georgieva highlighted the role the IMF and other international institutions can play in these efforts, including by developing harmonized disclosure and classification standards for green assets, and stress-tests that can be integrated into IMF surveillance.  

Going green. Decarbonization will require large investments in renewable energy and adaption efforts. Panelists discussed how central banks can spur the development of green financing to help meet these demands, including by developing green bond and equity markets.  Georgieva suggested developing a taxonomy for "green” and spoke about the debate around central banks using more interventionist approaches to facilitate investment in “green” industries.  Akhtar highlighted the role “green quantitative easing” programs could play in reducing global warming, through the purchase of bonds funding energy-efficient/renewable projects.

Fiscal Monitor 

Global warming is threatening our planet and living standards around the world, and the window of opportunity for containing climate change to manageable levels is closing rapidly. Carbon dioxide (CO2) emissions are a key driver of this alarming trend. Fiscal policy has an important role to play. This issue of the Fiscal Monitor argues that policymakers need to act urgently to mitigate climate change and thus reduce its damaging and deadly effects, including rising sea levels and coastal flooding, more frequent extreme weather events, and disruption to our food supply—key issues affecting all people globally. Full Report


Trends in Global Energy: When Will Consumption Peak?

Is global energy consumption going to saturate anytime soon? Using historical data, we find evidence for an S-shaped relationship between income per capita and energy consumption. Middle-income countries contribute the most to energy consumption growth, while advanced economies are closer to saturation but not enough to facilitate reaching climate change pledges. 


In a data-driven world, narratives generated by data can help inform economic policy making. So what do the IMF’s biggest data sets tell us about lagging regions, new approaches on climate change, and what happens when housing markets overheat?


Big Data: Big Stories: Putting a Value on Marine Life

A whale sequesters about 33 tons of carbon dioxide on its body when it dies and sinks to the ocean floor. They also are responsible for indirectly fertilizing phytoplankton, capturing around the same amount of carbon dioxide as 78 billion trees per year. How can we put a price on the benefits this marine life gives back to the earth? 

Big Data: Big Stories: The Price to Stop Climate Change

The window to stop climate change is closing rapidly and Finance Ministers must play a role. A carbon tax can stop the planet’s warming, but at what cost to people and governments?


Building Resilience in Developing Countries Vulnerable to Large Natural Disasters

Publication Date: June 26, 2019 

This paper discusses how countries vulnerable to natural disasters can reduce the associated human and economic cost. Building on earlier work by IMF staff, the paper views disaster risk management through the lens of a three-pillar strategy for building structural, financial, and post-disaster (including social) resilience. A coherent disaster resilience strategy, based on a diagnostic of risks and cost-effective responses, can provide a road map for how to tackle disaster related vulnerabilities. It can also help mobilize much-needed support from the international community.

Fiscal Policies for Paris Climate Strategies—from Principle to Practice

Publication Date: May 1, 2019 

This paper discusses the role of, and provides practical country-level guidance on, fiscal policies for implementing climate strategies using a unique and transparent tool laying out trade-offs among policy options.

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