Climate Change
The IMF and Climate Change
Climate change presents a major threat to long-term growth and prosperity, and has a direct impact on the economic wellbeing of all countries. The IMF has an important role to play in helping its members institute fiscal and macroeconomic policies to help address these climate-related challenges. We are mainstreaming climate-related risks and opportunities into our macroeconomic and financial policy advice. Climate considerations are now embedded in our bilateral and multilateral surveillance, capacity development, and lending. We also collaborate with other organizations on climate issues.
Through our analytical work we have examined policy issues such as an international carbon price floor, the transition to a green economy, border carbon adjustments, scaling up private climate finance in emerging market and developing economies, strengthening climate information architecture, fiscal policies to support adaptation, and green public investment and public financial management.
Loading component...
Loading component...
Loading component...
Loading component...
The IMF’s approach to climate change is guided by its Climate Change Strategy, which sets out how the institution will integrate climate-related macroeconomic and financial risks into its core activities, including surveillance, lending, and capacity development.
Surveillance
Article IV consultations will cover macro-critical issues related to climate change. These include macroeconomic policies to adapt to and build resilience to climate change; challenges presented by a global transition to low-carbon energy; and domestic policy challenges that arise in the context of achieving countries’ own mitigation goals as well as countries’ contributions to the global mitigation effort.
Financial Stability Assessment Program (FSAP)
FSAPs are paying increasing attention to climate risk analysis for the financial system. Recent FSAPs have looked at the implications of transition risk in Norway, South Africa, Chile, Colombia and the UK, and physical risk in the Philippines. Where relevant, climate risk considerations are also being embedded in FSAP reviews of financial supervision and regulation.
Capacity Development
The IMF provides capacity development to member countries vulnerable to climate change and natural disasters.
- The Climate Policy Assessment Tool (CPAT) helps policymakers to assess, design, and implement climate mitigation policies for over 200 countries.
- The climate-module of Public Investment Management Assessments (C-PIMA) tool helps governments identify potential improvements in public investment institutions and processes to build low-carbon and climate-resilient infrastructure.
- The Climate Policy Diagnostics (CPD) provides countries with an in-depth analysis of their climate policies, focusing on mitigation and adaptation strategies, and addresses the necessary institutional and legal frameworks to support these policies.
- The Macroeconomics of Climate Change course and other regional workshops help build knowledge at Finance Ministries and Central Banks.
Policy Advice
Adaptation
Guidance on building financial and institutional resilience to natural disasters and extreme weather events.
Mitigation
Advice on measures to contain and reduce emissions through policies and tools to help countries achieve their mitigation goals.
Data
The IMF's Climate Change Indicators Dashboard provides a platform for disseminating climate change data for macroeconomic and financial stability analysis.
Lending
The IMF’s Resilience and Sustainability Trust (RST) helps low-income and vulnerable middle-income countries build resilience to external shocks and ensure sustainable growth, contributing to their longer-term balance of payments stability. It complements the IMF’s existing lending toolkit by providing longer-term, affordable financing to address longer-term challenges, including climate change and pandemic preparedness.
COP29: Bridging the Adaptation Financing Gap: Challenges and Potential Solutions
Panelists discuss how to enhance partnerships and cooperation to scale up adaptation financing for EMDEs and explore the role various stakeholders play in n attracting private capital for adaptation investments.
COP29: The Pioneering Role of IMF’s Resilience and Sustainability Trust (RST) in Climate Action
Panelists discuss how specific countries benefited from the Resilience and Sustainability Trust (RST) and the lessons learned in the process.
COP29 Event – Unlocking Financing for the Green Transition in Emerging and Developing Economies
Delivering on global climate goals requires a shift to renewable energy and other green technologies. The main challenge for developing economies is securing funding for this transition. With limited fiscal space and low financial development, foreign direct investment (FDI) and official lending are crucial.