International Monetary Fund (IMF) on Sunday called for investment by the public and private sectors for decisively reducing emissions. It also hailed India’s G20 Presidency as a ‘powerful reminder’ of a joint effort for yielding much more than expected in resolving global problems.
“Our one and only earth is threatened by existential climate change. Ahead of COP28, we must raise ambition to decisively reduce emissions to prevent grave risks to economic wellbeing and macro-financial stability,” IMF Managing Director Kristalina Georgieva said in a statement. She was in the capital to attend G20 Leadership Summit here which concluded on Sunday.
Further she said that transforming this ambition into reality will require large investments both from the international community and the private sector, as well as an appropriate price for carbon. “G20 members must lead by example in delivering on the promises of $100 billion per year for climate finance, supported by strengthening the Multilateral Development Banks,” she said while adding that IMF has secured over $40 billion to support vulnerable countries through our Resilience and Sustainability Trust (RST) to build climate resilience.
“At the same time, countries also need to mobilize domestic resources to finance and manage the green transition through tax reforms, effective and efficient public spending, strong fiscal institutions, and deep local debt markets,” she said. Also, she highlighted that the IMF is providing policy support and capacity development in collaboration with partners to help countries.
Appreciating India’s G20 Presidency, she termed it as a powerful reminder that “when the international community comes together to solve global problems, much can be accomplished.” She said she looks forward to further strengthening the bonds of international cooperation to create a more prosperous and resilient global economy for all. “Leaders wholeheartedly embraced the theme of India’s Presidency of “One Earth, One Family, One Future” and conveyed a strong consensus for joint action to address global challenges in the New Delhi Declaration,” she said.
Global economy
Talking about global economy, she said that though economies are recovering but the recovery is slow and uneven, with medium-term growth prospects being the weakest in decades in an environment of still elevated inflation, high interest rates, and growing fragmentation. The risk of further divergence is real, with richer countries being more resilient to shocks and vulnerable emerging and low-income countries contending with limited buffers, added the IMF MD.
“Against this background, all countries should pursue sound policies to support economic and financial stability and growth-oriented structural reforms. This is especially important in emerging and developing countries, where such reforms can boost output by up to 8 per cent over four years,” she said.
Emphasing the need for quota reforms, she said that since the start of the pandemic, the IMF has injected $1 trillion in reserves and liquidity through lending to nearly 100 countries and the historic SDR allocation. “To make the global economy stronger and more resilient in a more shock-prone world, it is vital to reach an agreement to increase the IMF’s quota resources before the end of the year and secure the needed resources for the Fund’s interest-free support to the poorest countries through the Poverty Reduction and Growth Trust,” she said.