Rio+20: United Nations Conference on Sustainable Development
The Future We Want
June 12, 2012
Twenty years after the original Earth Summit (Eco 92), world leaders will reconvene again in Rio de Janeiro, from June 20-22 for the United Nations Conference on Sustainable Development (Rio+20).
The International Monetary Fund is exploring how macroeconomic and especially fiscal instruments can be used to address the urgent challenges of climate change; while emphasizing that social and environmental issues matter for economic performance and are themselves affected by the economy.
The Economic and Social Council (ECOSOC) of the United Nations held its Annual Ministerial Review from July 2 – 3, which provided a platform for further discussion of several of the themes highlighted in Rio.
The IMF's Deputy Managing Director Min Zhu participated in the high-level dialogue with the international financial and trade institutions on current developments in the world economy as well as in a panel discussion of the Development Cooperation Forum (DCF) titled “What lies beyond aid—how can development cooperation serve as a catalyst for other sources of development financing”. Read excerpts of the ECOSOC's press release.
Fiscal Instruments, a win-win for policymakers?
The IMF's work includes research on getting the prices right and the right incentives to help countries address climate change and other environmental challenges. Fiscal instruments, either environmental taxes or systems of pollution rights sold by the government, are the most effective instruments for exploiting near and longer-term options for reducing emissions (e.g., investments in renewables and energy efficiency) while at the same time providing a potentially valuable source of government revenue.
The IMF has published a handbook for policymakers, Fiscal Policy to Mitigate Climate Change, with many practical suggestions for designing and implementing fiscal instruments to reduce greenhouse gas emissions. Related work at the IMF covers, for instance, the macroeconomic, fiscal, and financial implications of climate mitigation and adaptation policies; the appropriate design of fuel and other environmental taxes; the measurement of energy subsidies and protection of the poor when they are scaled down; border tax adjustments; and the taxation of resource industries. See, for example:
- Environmental Tax Reform: Principles from Theory and Practice to Date by Dirk Heine, John Norregaard, and Ian W.H. Parry
- Going Green, F&D article by Luc Eyraud and Benedict Clements
- IMF Work on Fiscal Policy and Climate Change
- Mobilizing Climate Finance: A Paper prepared at the request of G20 Finance Ministers; October 6, 2011
- Promising Domestic Fiscal Instruments for Climate Finance: Background Paper for the Report to the G20 on "Mobilizing Sources of Climate Finance"; Prepared by staff of the International Monetary Fund; November 2011
- Petroleum Product Subsidies: Costly, Inequitable, and Rising
Social Protection, a pillar of sustainable development
The third pillar of sustainable development is social development, where job creation and inclusiveness matters most. Economic growth and environmental preservation mean nothing if the needs of people are not met. The IMF is working on social spending, social safety nets, and social protection systems, including pension and other entitlement reforms, and social protection floors, in collaboration with the International Labour Organization (ILO), UNICEF and other United Nations agencies.
The IMF/ILO collaboration was deepened and formalized at a joint conference in Oslo, in September 2010. The collaboration under the Social Protection Floor Initiative has been piloted in three countries (Mozambique, Vietnam and El Salvador), and its results have been presented in the Bachelet Report on Social Protection Floors and in a recent ILO/IMF report prepared for the meeting of the G20 Labor and Employment Ministers on May 17-18, 2012 in Mexico. This collaboration leverages the expertise of partner institutions, including the World Bank, ILO, and OECD, and is complemented by extensive consultations and outreach, such as the informal dialogue with CSOs during the 2012 IMF/WB Spring Meetings, or the inauguration of a seminar series on "Jobs & Growth".
- Growing Out of Poverty, F&D article by Alicia Bárcena
- Towards a New Growth Strategy for Employment, Decent Work and Development in Zambia, Joint Government of Zambia-IMF-ILO Conference
- The IMF’s Role in Helping Protect the Most Vulnerable in the Global Crisis
- The Challenges of Growth, Employment and Social Cohesion, Joint ILO-IMF Conference in Cooperation with the Office of the Prime Minister of Norway