Publication - The International Monetary Fund, Climate Change and Development: A Preliminary Assessment
While the IMF has made modest progress to integrate climate into its surveillance activity and notably has established a Resilience and Sustainability Facility (RSF), the report finds that the IMF must show greater leadership on climate change and development in three key areas:
Multilateral surveillance activities have to date adopted a “one-size-fits-all” approach with carbon pricing as a panacea for climate action.
Bilateral surveillance activities are underestimating the macroeconomic implications of financing climate transitions in a financially stable manner.
The IMF lending toolkit lacks appropriate scale and overemphasizes short-term fiscal consolidation over long-run resource mobilization.
To address these gaps in progress, the Task Force outlines a series of concrete policy improvements across the IMF toolkit to advance these goals:
Key Policy Improvements:
Broaden multilateral surveillance activities to strengthen the focus on an investment-led approach to a resilient and just transition.
Strengthen bilateral surveillance by deploying better analytical tools and support capacity building in developing countries to strengthen climate policy analysis.Scale and reform the IMF lending toolkit to align short-term and longer-run financing horizons without jeopardizing debt sustainability and growth prospects.