The IMF and Climate Change

Climate Change and the IMF

Climate change presents a major threat to long-term growth and prosperity, and it has a direct impact on the economic wellbeing of all countries.

The IMF has a role to play in helping its members address those challenges of climate change for which fiscal and macroeconomic policies are an important component of the appropriate policy response.

The Fund publishes research on economic implications of climate change and provides policy advice to our membership to help them capture the opportunities of low-carbon, resilient growth.

Our Policy Guidance Relates to:

1. Mitigation: including advice on measures to contain and reduce emissions through policies—such as increasing carbon taxes, reducing fuel subsidies and improving regulation—and providing tools to help countries achieve their Nationally Determined Contributions.

2. Adaptation: including guidance on building financial and institutional resilience to natural disasters and extreme weather events, and infrastructure investments to cope with rising sea levels and other warming-related phenomena.

3. Transition to a low-carbon economy: including updates to financial sector regulation to cover climate risks and exposure to “brown” assets, as well as measures to help countries diversify economies away from carbon intensive industries while mitigating the social impact on affected communities.

Highlights

The IMF believes we can put the world on a path to net zero. How can we do it?

1. Invest more in green infrastructure and clean energy

2. Gradually raise carbon prices – encouraging the switch to clean technologies

3. Invest carbon revenues in people to make the transition equitable, inclusive, and pro-growth

A green recovery that delivers on the Paris Climate Agreement is possible if governments act now, decisively, together.

Country Reports

The CCPA is a joint IMF-World Bank assessment and provides an overarching assessment of countries’ climate strategies.