The International Monetary Fund (IMF) is exploring ways to help its members address climate change policy challenges as global warming threatens to undermine productivity and growth, affecting the fiscal positions of governments and their debt trajectories.
Climate change is expected to affect asset valuations, with repercussions for financial stability, and also redistribute income around the globe, which will influence trade patterns and exchange rate valuations, said a press statement.
This will make it critical for the Fund to play a bigger role in climate-related activities, said the statement.
The Fund is discussing a paper that proposes strate how the multilateral institution can play a role in promoting policy coordination between countries to mitigate climate change.
“To live up to its mandate … the IMF needs to assist its members with addressing these challenges,” it said.
“The time has come for a systematic and strategic integration of macro-critical aspects of climate change into the IMF’s core activities.”
In April, the fund urged countries to take swift action on climate change to avert future disasters, accelerate the push for greener economies and boost the economic recovery from the Covid-19 pandemic.—TLTP