GDP Publishes Policy Brief on the Need for IMF Climate Strategy
On March 15, 2021, The Global Development Policy (GDP) Center, an affiliated center at the Frederick S. Pardee School of Global Studies at Boston University, published a new policy brief on the International Monetary Fund (IMF) and how the global organization needs to devise a climate change strategy that enhances stability, equity, growth, and sustainable development.
The brief, titled “Climate Change and the IMF Surveillance: The Need for Ambition,” outlines the macro-critical aspects of climate change that will need to be incorporated into IMF surveillance activity and examines the extent to which climate risks have been a part of IMF surveillance in recent years. The research shows that the IMF has paid minimal and uneven attention to climate risks in Article IV reports, and even less so in its Financial Sector Assessment Programs (FSAP)—though in each case the IMF has experimented with analyses that can be built upon.
Given the severity of the climate crisis and the critical role the IMF can play in supporting sustainable and climate conscious development, the authors argue it is imperative that the IMF:
- Recognize that both physical and transition risks within and across countries are macro-critical threats to financial and fiscal systems;
- Ensure that physical and transitions risks analysis within and across countries is compulsory, systematic, and universal for all Article IV and FSAPs moving forward;
- Work with staff, member states, stakeholders, the Network for Greening the Financial System, and experts to build on its early experience and align IMF surveillance policy with ambitious climate change goals.
The full policy brief can be read on the GDP Center’s website. The brief was also the subject of an article in Reuters.
The GDP Center is a university-wide research center affiliated with the Pardee School of Global Studies. The GDP Center’s mission is to advance policy-oriented research for financial stability, human well-being, and environmental sustainability. Visit the GDP Center’s website for more.