Green recovery
Source details
- Canonical URL
- Green recovery
Other formats
Bibliographic details
- Authors: Kristalina Georgieva
Overview
- In the aftermath of COVID-19, governments deployed extraordinary policy measures to save lives and protect people’s livelihoods; significant further efforts will be needed during the recovery phase to ensure a sustainable recovery, which policymakers must act to promote as a “green recovery.”
- The International Monetary Fund (IMF) presents analysis and policy guidance under the themes Green Finance, Climate Resilience, Climate and the Economy, Mitigation, Fossil Fuel Subsidies, and Green Recovery.
EU Climate Mitigation Policy — macroeconomic and distributional analysis
- Purpose: Contribute to the debate on policy choices to reach more ambitious 2030 emission reduction goals under consideration by EU policymakers.
- Key finding:
- A well-designed package consisting of:
- more extensive carbon pricing across EU countries and sectors,
- cuts in distortionary taxes, and
- targeted green investment support
- would allow the EU to reach the emission goals with practically no effects on aggregate income.
- Social and political acceptability recommendations:
- Use part of the revenue from carbon pricing to compensate the most vulnerable households.
- Support the transition of workers to greener jobs.
- Trade and leakage mitigation:
- A carbon border adjustment mechanism could complement the package to avoid an increase in emissions outside the EU due to higher carbon prices in the EU (“carbon leakage”).
- Risk-reward assessment:
- Benefits of reducing the risk of extreme life-threatening climate events and health benefits from lower air pollution clearly outweigh the costs of mitigation policies.
- Attribution: IMF publication titled "EU Climate Mitigation Policy."
Sectoral Policies for Climate Change Mitigation in the EU — sectoral analysis and policy gaps
- Context:
- Total EU emissions are nearly a quarter below their 1990 level.
- Progress has varied across sectors:
- Power and industry emissions have fallen by about a third.
- Buildings emissions have fallen by a quarter.
- Agriculture emissions have fallen by a fifth.
- Transport emissions have risen.
- Diagnosis:
- Divergence in sectoral performance reflects:
- differences in effective carbon prices,
- cost differences among available abatement channels,
- market imperfections, and
- policy gaps.
- Policy implication:
- Specific sectoral policies are needed to address these factors to achieve the new emissions reduction goals.
- Attribution: IMF publication titled "Sectoral Policies for Climate Change Mitigation in the EU."
Greening the Recovery — fiscal policy guidance during COVID-19
- Message:
- Fiscal policy is rightly focused on fighting the COVID-19-induced economic crisis, but climate change remains and requires decisive action.
- Decisions taken during the COVID-19 response may shape climate and human health for decades; fiscal policymakers should “green” their response to prevent one crisis leading to another.
- Public support for green measures may be higher after the COVID-19 crisis.
- Product: Special Series on Fiscal Policies to Respond to COVID-19 (IMF).
Regional focus: Sub‑Saharan Africa — resilient recovery pathway
- Date: September 15, 2020
- Imperative:
- The vast global fiscal support deployed to fight the pandemic should also work to build a smarter, greener and more equitable future.
- Sub‑Saharan Africa has the greatest needs and the world’s youngest population, increasing urgency to build forward better.
- Call to action:
- Chart a path to a more resilient recovery for sub‑Saharan African countries.
- Attribution: IMF piece titled "Charting a Path for a Resilient Recovery in Sub Saharan Africa."
Fiscal policy and crisis-phase commentary (selected IMF communications)
- "The Next Phase of the Crisis: Further Action Needed for a Resilient Recovery" — July 15, 2020:
- As many countries gradually reopen while the pandemic remains, a new phase requires further policy agility and action to secure a durable and shared recovery.
- "Why Sustainable Food Systems are Needed in a post-COVID World" — July 14, 2020:
- Food systems are essential to economic activity and have been long neglected by macroeconomists despite the global agri-food industry's mechanization, subsidies, and concentration.
- "Fiscal Policies for the Recovery from COVID-19" — May 06, 2020:
- Fiscal policies have provided large emergency lifelines during the pandemic and are invaluable to increase a country’s readiness to respond to crises and support recovery.
- "A Global Crisis Like No Other Needs a Global Response Like No Other" — April 20, 2020 (by Kristalina Georgieva):
- The crisis is:
- More complex, with interlinked shocks to health and economies that halted normal life;
- More uncertain, as effective treatments, containment and restart strategies are learned gradually;
- Truly global, as pandemics and the economic shocks they cause do not respect borders.
- "Fiscal Policies to Contain the Damage from COVID-19" — April 15, 2020:
- In times of pandemic, fiscal policy is key to save lives and protect people; governments must act decisively but keep accurate records ("keep the receipts").
- Attribution: IMF communications and statements listed with dates and authors where provided.
Events and remarks related to climate and green recovery
- EU Environment Ministers Video-conference — Closing Remarks by Kristalina Georgieva | July 13, 2020.
- Virtual High-Level Dialogue of the Carbon Pricing Leadership Coalition (CPLC) — Introductory Remarks by Tao Zhang, IMF Deputy Managing Director | June 9, 2020.
- Organization for Security and Cooperation in Europe Parliamentary Web Dialogue — Opening Remarks: "COVID-19: Opportunities for a Green Recovery" by Tao Zhang, IMF Deputy Managing Director | May 22, 2020.
- Petersberg Climate Dialogue XI — Managing Director’s Opening Remarks by Kristalina Georgieva | April 29, 2020.
- Attribution: IMF event remarks and openings listed with speakers and dates.
Content in this bundle
References