A New Climate Economy

IMF Blog, November 26, 2019

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Author: Gita Bhatt
Date: November 26, 2019
Theme: Economic and financial impact of climate policy choices; moving from discussion to concrete action on climate change.
Key framing quote: “Everybody talks about the weather, but nobody does anything about it.” (attributed to Mark Twain)

The changing climate, largely wrought by humans, is bringing rising sea levels, temperature extremes, and more frequent and harsher storms.
These phenomena threaten to displace lives, livelihoods, and communities, with clear economic consequences, often at a high price tag, around the world.
Conclusion: Climate is described as “the biggest risk the world faces.”

The issue of Finance & Development looks at:
- The economic and financial impact of climate policy choices.
- Concrete solutions that offer growth opportunities driven by technological innovation, sustainable investment, and a dynamic private sector.
Contributions and key points:
- IMF Managing Director Kristalina Georgieva: Dealing with climate change requires both mitigating damage and adapting for the future; this includes pricing risk and providing incentives for green investment.
- Kenneth Gillingham: In the long run, the costs of climate action may be lower than we think.
- Ian Parry: Aggressive carbon taxes would help individual nations meet their emission-reduction goals and scale up action globally.
- Mark Carney and others: Harnessing finance can open enormous opportunities—from transforming energy to reinventing protein.
- Ralph Chami and fellow researchers: Saving whales can help save the planet.

Collective responsibility: “In this shared crisis, everyone has a responsibility to act.”
Urgency and collaboration: The world’s fortunes and those of future generations depend on the ambition and urgency with which leaders collaborate to address the global climate emergency today.
Role of younger generations: Young people, exemplified by Greta Thunberg and others, are presented as reminders of human capacity to remake the world and as stakeholders whose future is at stake.

Published in Finance & Development.
The IMF context: The IMF is based in Washington D.C. and is “an organization of 191 countries, working to foster global monetary cooperation and financial stability around the world.”
Note on authorship: IMFBlog is a forum for the views of IMF staff and officials; “The views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board.”

Source: A New Climate Economy — Finance & Development (November 26, 2019).

The Economics of Climate Change – IMF F&D | December 2019
- The Economics of Climate Change – IMF F&D | December 2019 (Markdown version)
- The Economics of Climate Change – IMF F&D | December 2019 (PDF)