## Remarks of the Managing Director at the High-Level Dialogue on Energy

_IMF News, September 24, 2021_

## Source details

**Canonical URL:** [Remarks of the Managing Director at the High-Level Dialogue on Energy](https://www.imf.org/en/news/articles/2021/09/24/unga-high-level-dialogue-on-energy)

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## Bibliographic details
- Published: September 24, 2021

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### Context and opening
- Speaker: Kristalina Georgieva.
- Event: High-Level Dialogue on Energy, under the auspices of the United Nations General Assembly.
- Date: September 24, 2021.
- Main premise: Scientific and economic imperatives require dramatic reductions in the use of fossil fuels to avoid "untold destruction" to the environment, harm to health and livelihoods, and to keep the 1.5°C goal of the Paris Agreement within reach.

### Economic rationale for pricing fossil fuels correctly
- Core argument: Getting fossil fuel prices right is key to achieving reductions in use; the "right prices must fully reflect both supply costs and environmental costs – especially carbon emissions and local air pollution."
- Underpricing consequences:
  - Undermines domestic and global environmental objectives.
  - Predominantly benefits higher-income households.
  - Deprives governments of fiscal resources that could be repurposed.

### IMF staff estimates and key statistics
- Global fossil fuel subsidies amount to around $6 trillion in 2020—this is 6.8 percent of global GDP.
- More than 70 percent of these subsidies reflects undercharging for environmental costs.
- Modeled impacts if fossil fuel prices increase to fully reflect environmental and supply costs by 2025:
  - Global carbon emissions would fall by one-third—in line with keeping global warming to 1.5 degrees Celsius.
  - Almost one million deaths due to air pollution would be avoided every single year.
  - Additional revenues would rise by nearly 4 percent of global GDP.

### Policy implications and recommendations
- Use additional revenues to:
  - Boost green investment.
  - Boost social spending.
  - Ensure a just transition to the new climate economy.
- Acknowledgement of political difficulty: "Raising fuel prices is, of course, very challenging."
- Specific IMF staff proposal:
  - An international carbon price floor among large emitters, set according to development levels, to help get the right price on fuel and accelerate global climate action.
- Urgency: "And now is the time to do it."

*Kristalina Georgieva — Remarks at the High-Level Dialogue on Energy, September 24, 2021, under the auspices of the United Nations General Assembly.*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
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_Source: https://www.imf.org/en/news/articles/2021/09/24/unga-high-level-dialogue-on-energy_