{
  "title": "Getting Back on Track to Net Zero: Three Critical Priorities for COP27",
  "publication": "IMF Blog, November 4, 2022",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2022/11/04/getting-back-on-track-to-net-zero-three-critical-priorities-for-cop27",
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  "summary": "The devastation and destruction of climate change will only worsen if we fail to act now",
  "sections": [
    {
      "heading": "Context and key message",
      "content": "- Climate impacts in 2022 cited: typhoons in Bangladesh, unprecedented floods in Pakistan, heatwaves in Europe, wildfires in North America, dry rivers in China, and droughts in Africa.\n- If global warming continues, scientists predict more devastating disasters, long-term disruption to weather patterns, potential mass migration, and risk of catastrophic tipping points.\n- Three fronts for action: steadfast policies to reach net zero by 2050, strong adaptation measures, and staunch financial support for vulnerable countries."
    },
    {
      "heading": "Net zero by 2050: findings and policy prescriptions",
      "content": "- Objective: limit further temperature rises to 1.5 degrees to 2 degrees.\n- Emissions target: cutting emissions by 25‑50 percent by 2030 compared to pre-2019 levels.\n- Current commitments: about 140 countries—accounting for 91 percent of greenhouse gas emissions—have proposed or set net-zero targets for around mid-century.\n- Gap between targets and outcomes:\n  - New IMF analysis: current global climate targets would only deliver an 11 percent cut.\n  - The gap is equivalent to more than five times the current annual emissions of the European Union.\n- Policy mix recommended:\n  - Price carbon, including cutting fossil fuel subsidies, or implement alternative measures that achieve equivalent outcomes (feebates, regulations).\n  - Consider an international carbon price floor agreement asking large emitters to pay a minimum price of $25-$75 per ton of carbon depending on their national income level (not necessarily structured as taxes; collaborative, pragmatic, equitable).\n  - Include measures to reduce methane; cutting methane emissions by half over the next decade would prevent an estimated 0.3 degree rise in the average global temperature by 2040.\n  - Incentivize private investments in low-carbon technologies, growth-friendly public investments in green infrastructure, and support for vulnerable households.\n- Cost estimate:\n  - IMF projection: net cost of moving to clean technology—including savings from avoiding unnecessary investments in fossil fuels—would be around 0.5 percent of global gross domestic product in 2030.\n  - Note: delay would make the shift far more costly and disruptive."
    },
    {
      "heading": "Urgent need to adapt",
      "content": "- Rationale: some global warming is already locked in; mitigation alone is insufficient.\n- Disproportionate burden:\n  - Larger economies must deliver the lion’s share of cuts, while smaller economies pay the biggest costs and face the biggest adaptation bills.\n  - In Africa, a single drought can lower a country’s medium-term economic growth potential by 1 percentage point, creating a government revenue shortfall equivalent to a tenth of the education budget.\n- Adaptation needs and fiscal constraints:\n  - For around 50 low-income and developing economies, the IMF estimates annual adaptation costs will exceed 1 percent of GDP for the next 10 years.\n  - Many of these countries have exhausted fiscal space during nearly three years of crises (pandemic, rampant inflation) and urgently need international financial and technical support.\n- Priority investments: resilience-building through infrastructure, social safety nets, early warning systems, and climate-smart agriculture."
    },
    {
      "heading": "Climate finance: innovate now",
      "content": "- Public finance:\n  - Advanced economies must meet or exceed the pledge of $100 billion in climate finance for developing countries.\n- Mobilizing private finance and instruments:\n  - Public money alone is insufficient; innovate to incentivize private investors.\n  - Strengthen governance and integrate climate considerations into public investment and financial management to unlock new financing sources.\n  - Proven instruments: closed-end investment funds to pool emerging market assets for scale and risk diversification.\n  - Multilateral development banks and donors should encourage institutional investors by providing equity (currently a small share of commitments).\n- Potential sources and data:\n  - Pension funds, insurance companies, and long-term investors collectively manage over $100 trillion of assets.\n  - Better data, standardized high-quality comparable information, harmonized climate disclosures, and aligning financing with climate-related goals are essential to facilitate decision-making and investment."
    },
    {
      "heading": "Role of the IMF",
      "content": "- The IMF is incorporating climate considerations across its work: economic and financial surveillance, data, capacity development, and analytical work.\n- Partnerships: World Bank, the Organisation for Economic Co-operation and Development, Network for Greening the Financial System, and others.\n- Financing tool:\n  - Resilience and Sustainability Trust: now has more than $40 billion in funding pledges, along with three staff-level agreements with Barbados, Costa Rica, and Rwanda.\n- Emphasis: cooperation and scaled-up international support are vital to meet the adaptation and mitigation challenges.\n\nKristalina Georgieva, November 4, 2022\n\n---\n\n\n References\n\n- New IMF analysis\n- an international carbon price floor agreement\n- by 1 percentage point\n- climate finance for developing countries\n- unlock new sources of financing\n- Resilience and Sustainability Trust\n- Barbados\n- Costa Rica\n- Rwanda\n\nSource: https://www.imf.org/en/blogs/articles/2022/11/04/getting-back-on-track-to-net-zero-three-critical-priorities-for-cop27"
    }
  ],
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    "Authors: Kristalina Georgieva",
    "Published: November 4, 2022",
    "Climate impacts in 2022 cited: typhoons in Bangladesh, unprecedented floods in Pakistan, heatwaves in Europe, wildfires in North America, dry rivers in China, and droughts in Africa.",
    "If global warming continues, scientists predict more devastating disasters, long-term disruption to weather patterns, potential mass migration, and risk of catastrophic tipping points.",
    "Three fronts for action: steadfast policies to reach net zero by 2050, strong adaptation measures, and staunch financial support for vulnerable countries.",
    "Objective: limit further temperature rises to 1.5 degrees to 2 degrees.",
    "Emissions target: cutting emissions by 25‑50 percent by 2030 compared to pre-2019 levels.",
    "Current commitments: about 140 countries—accounting for 91 percent of greenhouse gas emissions—have proposed or set net-zero targets for around mid-century.",
    "Gap between targets and outcomes:",
    "Policy mix recommended:",
    "Cost estimate:",
    "Rationale: some global warming is already locked in; mitigation alone is insufficient.",
    "Disproportionate burden:",
    "Adaptation needs and fiscal constraints:",
    "Priority investments: resilience-building through infrastructure, social safety nets, early warning systems, and climate-smart agriculture.",
    "Public finance:",
    "Mobilizing private finance and instruments:",
    "Potential sources and data:",
    "The IMF is incorporating climate considerations across its work: economic and financial surveillance, data, capacity development, and analytical work.",
    "Partnerships: World Bank, the Organisation for Economic Co-operation and Development, Network for Greening the Financial System, and others.",
    "Financing tool:",
    "Emphasis: cooperation and scaled-up international support are vital to meet the adaptation and mitigation challenges.",
    "[New IMF analysis](https://www.imf.org/en/Publications/staff-climate-notes/Issues/2022/10/31/Getting-on-Track-to-Net-Zero-Accelerating-a-Global-Just-Transition-in-This-Decade-525242)",
    "[an international carbon price floor agreement](https://www.imf.org/en/Blogs/Articles/2022/05/19/blog-why-countries-must-cooperate-on-carbon-prices)",
    "[by 1 percentage point](https://www.imf.org/en/Blogs/Articles/2022/03/23/blog032322-poor-and-vulnerable-countris-need-support-to-adapt-to-climate-change)",
    "[climate finance for developing countries](https://www.imf.org/en/Publications/staff-climate-notes/Issues/2022/10/28/Climate-Change-and-Select-Financial-Instruments-An-Overview-of-Opportunities-and-Challenges-525195)",
    "[unlock new sources of financing](https://www.imf.org/en/Publications/staff-climate-notes/Issues/2022/07/26/Mobilizing-Private-Climate-Financing-in-Emerging-Market-and-Developing-Economies-520585)",
    "[Resilience and Sustainability Trust](https://www.imf.org/en/Blogs/Articles/2022/01/20/blog012022-a-new-trust-to-help-countries-build-resilience-and-sustainability)",
    "[Barbados](https://www.imf.org/en/News/Articles/2022/09/28/pr22325-imf-reaches-staff-level-agreement-with-barbados-rst-program-with-accompanying-eff)",
    "[Costa Rica](https://www.imf.org/en/News/Articles/2022/10/03/pr22330-imf-reaches-staff-level-agreement-with-costa-rica-on-rsf-and-the-third-review-under-the-eff)",
    "[Rwanda](https://www.imf.org/en/News/Articles/2022/10/06/pr22340-rwanda-imf-staff-reaches-staff-level-agreement-rst-program-accompanying-pci)"
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