Climate change is a linchpin of the Sustainable Development Goals
The IMF is helping countries implement mitigation strategies, build resilience, and manage risk.
Climate change remains a clear and present threat, yet actions to fight it have fallen short. Measures taken now to fight the climate crisis will create more resilient economies and help the recovery from the global pandemic be fair, smart, and green.
The IMF has contributed to global efforts by delivering analysis and enhancing country engagement on climate change. It will step up its efforts as the institution looks ahead to the United Nations Climate Change Conference in November 2021.
The IMF’s work with finance ministries, central banks, and financial regulators uniquely positions it to help counsel on these policies.
On climate change mitigation, the IMF provided practical, country-specific guidance on fiscal and other policy options to implement mitigation strategies, such as carbon pricing and fossil fuel subsidy reform.
To help countries cope with natural disasters when they happen, the IMF has deepened the financial safety net by increasing access limits for emergency financing.
To help countries adapt and build resilience to climate change, the IMF, together with the World Bank, provided overarching assessments of preparedness, macroeconomic impact, mitigation, adaptation, and financing strategies for small, vulnerable, and capacity-constrained countries.
As part of this work, the IMF has published Climate Change Policy Assessments for Grenada, Micronesia, and Tonga this year.
The transition to a low-carbon economy will mean countries have to manage a number of risks. The IMF has proposed a carbon price floor arrangement among countries to effectively and equitably scale up global mitigation action. Other policy work has focused on financial regulation to internalize risks from exposure to “brown” assets such as fossil fuels, as well as on measures to ease the social impact of carbon mitigation or the need to diversify in economies that depend on fossil fuel exports.