January 25, 2021
PRESS OFFICER:
Phone: +1 202 623-7100Email: MEDIA@IMF.org
As prepared for delivery:
Excellencies:
I warmly welcome this dialogue and the participation of so many different Ministries. On this vital issue we need all hands on deck.
We are all aware there is no time to lose. So, let me make three quick points:
First, this is the year for action
In the emergency response to Covid 19, only a tiny fraction of G20 spending was climate-related. This is understandable, as the focus was on saving lives and livelihoods.
But now, in this next recovery phase, we must direct more resources to climate action. IMF analysis shows that a coordinated green infrastructure push, combined with the right carbon price signal, could boost global GDP in the next 15 years on average by 0.7 percent. It would also create millions of jobs, so desperately needed in the wake of the pandemic and, also, rising automation. And it will bring health benefits as well.
Yet, globally we are falling short in investment in climate resilience – and this shortfall is profound in the developing world. According to the Global Center for Adaptation, spending there is 5- to 10-times less than what is needed.
My second point is about policies
Increased resources matter; policies matter even more. The focus must be not only on green spending, but on overall economic and social policies. First and foremost, we must arrest and reverse the growth of carbon emissions, so there is less need for adaptation – for this elimination of harmful subsidies and forward guidance on carbon price are key. But we also must secure a just transition — one that compensates affected people and parts of the economy; and one that is anchored in building resilience to climate shocks.
My third message: the IMF is stepping up.
We have been clear: climate change is a fundamental risk to macroeconomic and financial stability. We have been increasing our efforts—and we will do even more this year:
—increasing coverage of climate actions in our annual country economic assessments – the Article IV consultations;
—incorporating climate risks in our financial sector assessments;
—scaling up capacity development to support our member countries with climate-related skills; and
—launching a new data initiative to help countries track climate change risks and policies.
Excellencies: Climate action is win-win-win-win: good for health, growth, jobs, and the planet.
Working together, we can do it.
