2021 Comprehensive Surveillance Review— Background Paper on Integrating Climate Change into Article IV Consultations
Policy Papers, May 18, 2021
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- 2021 Comprehensive Surveillance Review— Background Paper on Integrating Climate Change into Article IV Consultations
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Bibliographic details
- Published: May 18, 2021
- Series: Policy Papers
- DOI: https://doi.org/10.5089/9781513582689.007
Summary and purpose
- The paper addresses a gap: a systematic account of how to integrate climate change into IMF surveillance has been lacking to date.
- It argues that domestic policy challenges related to climate change are valid topics for Article IV consultations wherever these challenges cross the threshold of macro-criticality.
- It distinguishes between:
- Climate change adaptation and domestic policies to deliver a country’s Nationally Determined Contribution under the Paris climate accord — covered by the IMF’s bilateral surveillance mandate.
- Climate change mitigation — characterized as a global policy challenge and therefore falling under multilateral surveillance.
- The paper proposes a pragmatic approach that focuses especially on the mitigation efforts of the 20 largest emitters of greenhouse gases.
Findings and analytical conclusions
- The IMF has been involved in the climate debate since at least 2008, but lacked a systematic approach for integrating climate change into surveillance.
- Domestic climate policy issues (for example, adaptation for climate vulnerable countries and policies to meet Nationally Determined Contributions) can be treated as macro-critical and thus appropriate for Article IV consultations when they meet that threshold.
- Mitigation policy is framed as a global public good problem and therefore principally within multilateral surveillance responsibilities.
- The pragmatic approach emphasizes targeted engagement with the 20 largest greenhouse gas emitters on mitigation policies.
Policy recommendations and operational approach
- Focus bilateral Article IV surveillance on domestic climate challenges that are macro-critical for the country concerned (including adaptation and delivery of NDCs).
- Treat mitigation as primarily a multilateral surveillance issue, with the IMF directing mitigation-related advice and monitoring where global spillovers and collective outcomes matter.
- Prioritize engagement on mitigation policies with the 20 largest emitters of greenhouse gases as part of a pragmatic sequencing of IMF surveillance activities.
Subject and keywords
- Subject: Carbon tax, Climate change, Climate policy, Environment, Greenhouse gas emissions, Monetary policy, Natural disasters, Political economy, Taxes
- Keywords: Carbon tax, Climate change, climate change mitigation, Climate policy, Global, Greenhouse gas emissions, IMF's mitigation policy advice, Natural disasters, policy challenge, surveillance mandate, transparency policy
International Monetary Fund. Strategy, Policy, & Review Department "2021 Comprehensive Surveillance Review— Background Paper on Integrating Climate Change into Article IV Consultations", Policy Papers 2021, 032 (2021).
Content in this bundle
- Policy Paper