Managing Director Georgieva’s Closing Remarks EU Environment Ministers Videoconference
IMF News, July 13, 2020
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- Published: July 13, 2020
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- As prepared for delivery
- July 13, 2020
- Thank you to Minister Schulze for convening this important meeting at the start of Germany’s EU Presidency.
- Europe is identified as “a leader when it comes to environmental sustainability and in the fight against climate change” and “will play an important part in driving a green recovery.”
Three main points
- First: use of public money and accelerating green investments
- Governments are “leaning forward with large fiscal measures” and “it is important that this public money is used wisely.”
- Priorities for public support:
- Accelerate green investments.
- Ensure high-emitting businesses that benefit from public support undertake to reduce their emissions.
- Support job-rich activities that are climate positive, examples given:
- sustainable agriculture
- reforestation
- reducing energy intensity through building insulation
- Second: pricing carbon and phasing out fossil fuel subsidies
- Current and required carbon prices:
- “Globally, carbon trades today at around $2 per ton, but to achieve the goals of the Paris Agreement it needs to be at the level of $75 per ton.”
- Policy rationale:
- “Driving the carbon price up is essential.”
- For Ministers of Finance facing higher debt and higher deficits, acting on carbon “can make an important contribution to fiscal sustainability.”
- “Carbon pricing is the junction where fiscal sustainability meets environmental sustainability.”
- Fossil fuel subsidies:
- “Globally, fossil fuel subsidies are a big issue.”
- “Now—when commodity prices are low—is the moment to phase out these subsidies.”
- Third: pricing climate risk and financial sector action
- Need for financial institutions to:
- disclose climate related risks
- price these risks accordingly
- IMF commitments and actions:
- “We are including climate action as part of our financial sector assessments.”
- “We are going to provide the necessary inputs to Ministries of Finance on pricing carbon and pricing risk.”
- “We are integrating transformations into our surveillance work.”
- “As we engage in program design, we are stressing opportunities for a green recovery.”
Closing message
- Emphasis on urgency: “if you don't like pandemic crisis, you are not going to like the climate crisis one iota.”
- Call to action: “So, let's do the right thing and seize this opportunity to act.”
IMF Communications Department — Managing Director Georgieva’s Closing Remarks EU Environment Ministers Videoconference, July 13, 2020