## Climate Change and the Age of Adaptation

## Source details

**Canonical URL:** [Climate Change and the Age of Adaptation](https://www.imf.org/en/publications/fandd/issues/2019/12/climate-change-and-the-age-of-adaptation-georgieva)

## Other formats

- [Markdown version](/en/publications/fandd/issues/2019/12/climate-change-and-the-age-of-adaptation-georgieva/index.md)
- [Structured JSON version](/en/publications/fandd/issues/2019/12/climate-change-and-the-age-of-adaptation-georgieva/index.json)
- [Bundle manifest](/en/publications/fandd/issues/2019/12/climate-change-and-the-age-of-adaptation-georgieva/bundle-manifest.json)

## Bibliographic details
- Authors: KRISTALINA GEORGIEVA
- Published: December 1, 2019

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### Overview
- Kristalina Georgieva (Managing Director of the International Monetary Fund) argues we are entering an age of adaptation and must accelerate the global transition to a low-carbon economy.
- No individual or institution can stand on the sidelines; actions now determine outcomes for future generations.

### Human and long-term scenarios
- Illustrative lifetime impacts:
  - Kristalina Georgieva’s 9-year-old granddaughter:
    - By age 20: climate change may push an additional 100 million people into poverty.
    - By age 40: 140 million may become climate migrants.
    - By age 90: the planet may be 3–4° hotter and barely livable.
- Core message: reduce emissions, offset what cannot be reduced, and adapt to new climate realities.

### Reality check and rationale for adaptation
- Observed trends:
  - More frequent and more severe weather-related events: more droughts, more floods, more heat waves, more storms.
- Adaptation framing:
  - Adaptation is not a defeat but a defense; the right investments deliver a “triple dividend”:
    - Averting future losses.
    - Spurring economic gains through innovation.
    - Delivering social and environmental benefits, especially to those most at risk.
  - Examples of adaptation measures:
    - Updated building codes to better withstand extreme events.
    - Investing in climate-resilient agriculture, including research and development.

### Mitigation: carbon pricing and fiscal design
- IMF analysis recommendation:
  - Large emitting countries need to introduce a carbon tax that rises quickly to $75 a ton in 2030, consistent with limiting global warming to 2°C or less.
- Fiscal design principles:
  - Carbon taxes must be implemented in a careful and growth-friendly fashion.
  - Retool the tax system in fair, creative, and efficient ways—not just add a new tax.
  - Example: Sweden’s approach—low- and middle-income households received higher transfers and tax cuts to offset higher energy costs after introducing a carbon tax.
- Revenue uses and magnitudes:
  - Revenues estimated at 1–3 percent of GDP.
  - Portions of revenue could be directed back to low-income households and to support firms and households choosing green pathways.

### Adaptation, resilience-building, and IMF operational role
- Economic impacts of disasters:
  - Countries vulnerable to natural disasters suffer immediate losses and long-lasting economic effects.
  - In some countries, total economic losses exceed 200 percent of GDP—as when Hurricane Maria struck Dominica in 2017.
- IMF tools and activities:
  - Emergency lending facilities provide speedy assistance to low-income countries hit by disasters.
  - Support resilience-building strategies in highly vulnerable countries to prepare for and rebound from disasters.
  - Provide training and technical assistance to help governments better manage disaster risks and responses.
  - Collaborate with the World Bank on Climate Change Policy Assessments to assess mitigation and adaptation plans, risk management strategies, and financing, and to identify investment, policy, and capacity gaps.

### Financial sector, central banks, and new frontiers
- Engagement with central banks and regulators:
  - Work more closely with central banks, recognizing their roles in financial and price stability as they adapt regulatory frameworks and practices to climate risks.
  - Support improving climate risk disclosure and classification standards to help financial institutions and investors assess climate-related exposures and help regulators gauge system-wide risks.
  - IMF engagement includes working with the Network of Central Banks and Supervisors for Greening the Financial System and other standard-setting bodies.
- Climate-related stress testing:
  - Central banks and regulators should help banks, insurers, and nonfinancial firms develop climate-related “stress tests.”
  - Such stress tests can identify likely impact of severe adverse climate-driven shocks on solvency and financial stability.
  - IMF will push forward climate-change stress testing, including through country financial-sector and economy assessments.
  - Careful calibration is needed because testing must assess effects of shocks or policy actions that may have little historical precedent.

### Mobilizing finance and collective action
- Financial signals and instruments:
  - Rapid increase of green bonds is a positive trend, but much more is required to secure the future.
- Call to action:
  - Intensify efforts to exchange knowledge and ideas, formulate and implement policies, and finance the transition to the new climate economy.
  - Emphasis on collective responsibility: “we all need to intensify our efforts … Our children and grandchildren are counting on us.”

*Source: "Climate Change and the Age of Adaptation", Kristalina Georgieva, IMF F&D Magazine, December 2019*

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## Content in this bundle

- **كلام صريح**
  - [كلام صريح (Markdown version)](/-/media/files/publications/fandd/article/2019/december/ar/straight.pdf.md){rel="alternate" type="text/markdown"}
  - [كلام صريح (PDF)](/-/media/files/publications/fandd/article/2019/december/ar/straight.pdf){rel="external" type="application/pdf"}
- **Climate Change and the Age of Adaptation – IMF F&D | DECEMBER 2019**
  - [Climate Change and the Age of Adaptation – IMF F&D | DECEMBER 2019 (Markdown version)](/-/media/files/publications/fandd/article/2019/december/climate-change-and-the-age-of-adaptation-georgieva.pdf.md){rel="alternate" type="text/markdown"}
  - [Climate Change and the Age of Adaptation – IMF F&D | DECEMBER 2019 (PDF)](/-/media/files/publications/fandd/article/2019/december/climate-change-and-the-age-of-adaptation-georgieva.pdf){rel="external" type="application/pdf"}
- **Hablando claro: La era adaptativa ● Finanzas y Desarrollo ● Diciembre de 2019**
  - [Hablando claro: La era adaptativa ● Finanzas y Desarrollo ● Diciembre de 2019 (Markdown version)](/-/media/files/publications/fandd/article/2019/december/es/climate-change-and-the-age-of-adaptation-georgieva.pdf.md){rel="alternate" type="text/markdown"}
  - [Hablando claro: La era adaptativa ● Finanzas y Desarrollo ● Diciembre de 2019 (PDF)](/-/media/files/publications/fandd/article/2019/december/es/climate-change-and-the-age-of-adaptation-georgieva.pdf){rel="external" type="application/pdf"}
- **Il est temps de s’adapter**
  - [Il est temps de s’adapter (Markdown version)](/-/media/files/publications/fandd/article/2019/december/fr/climate-change-and-the-age-of-adaptation-georgieva.pdf.md){rel="alternate" type="text/markdown"}
  - [Il est temps de s’adapter (PDF)](/-/media/files/publications/fandd/article/2019/december/fr/climate-change-and-the-age-of-adaptation-georgieva.pdf){rel="external" type="application/pdf"}
- **Эпоха адаптации**
  - [Эпоха адаптации (Markdown version)](/-/media/files/publications/fandd/article/2019/december/ru/climate-change-and-the-age-of-adaptation-georgieva.pdf.md){rel="alternate" type="text/markdown"}
  - [Эпоха адаптации (PDF)](/-/media/files/publications/fandd/article/2019/december/ru/climate-change-and-the-age-of-adaptation-georgieva.pdf){rel="external" type="application/pdf"}
- **Climate Change and the Age of Adaptation – IMF F&D | DECEMBER 2019**
  - [Climate Change and the Age of Adaptation – IMF F&D | DECEMBER 2019 (Markdown version)](/-/media/files/publications/fandd/article/2019/december/zh-do-not-use-rekia/climate-change-and-the-age-of-adaptation-georgieva.pdf.md){rel="alternate" type="text/markdown"}
  - [Climate Change and the Age of Adaptation – IMF F&D | DECEMBER 2019 (PDF)](/-/media/files/publications/fandd/article/2019/december/zh-do-not-use-rekia/climate-change-and-the-age-of-adaptation-georgieva.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/fandd/issues/2019/12/climate-change-and-the-age-of-adaptation-georgieva_