COVID-19

IMF leader says pandemic stimulus must focus on battling climate crisis

IMF Managing Director Kristalina Georgieva arrives for a conference hosted by the Vatican on economic solidarity, at the Vatican, February 5, 2020.

The IMF managing director has urged a green recovery from COVID-19, in order to protect our planet. Image: REUTERS/Remo Casilli

Reuters Staff
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on COVID-19?
The Big Picture
Explore and monitor how COVID-19 is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

COVID-19

  • IMF Managing Director, Kristalina Georgieva, calls for fiscal responses to conorovirus to also tackle climate change.
  • Green incentives could include green bonds and other forms of sustainable finance.
  • The IMF estimate that a low-carbon transition would require $2.3 trillion in investment every year for a decade.

Massive fiscal stimulus measures adopted by governments around the world to combat the coronavirus pandemic must be tailored to tackle climate change at the same time, International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday.

Speaking at a virtual summit known as the Petersberg Climate Dialogue, Georgieva joined German Chancellor Angela Merkel and U.N. Secretary Antonio Guterres in calling for focused efforts to promote a "green recovery" from the pandemic crisis.

"Taking measures now to fight the climate crisis is not just a 'nice-to-have'. It is a 'must-have' if we are to leave a better world for our children,' the IMF leader told the summit.

Have you read?

"What we do now will not only reshape our economies and societies; it will also reshape humanity's future on this planet," she said. "A 'green recovery' is our bridge to a more resilient future."

Georgieva said governments had already adopted extraordinary measures to fight the pandemic, which has now infected over 3.11 million people and killed 216,667, but further efforts would be needed to respond to the worst economic downturn since the Great Depression of the 1930s.

To ensure that fiscal stimulus addressed climate change risks, she said governments should make financial lifelines for carbon-intensive companies contingent on commitments to reduce carbon emissions. This was done during the global financial crisis, when some automakers committed to higher fuel efficiency standards.

Georgieva urged governments to focus fiscal spending to promote green technologies, clean transport, sustainable agriculture and climate resilience.

"With oil prices at record-low levels, now is the time to phase out harmful subsidies," Georgieva said, citing the IMF's estimate that a low-carbon transition would require $2.3 trillion in investment every year for a decade.

She also urged governments to promote green finance by focusing on green bonds and other forms of sustainable finance, and mandating financial firms to better disclose climate risks in their lending and investment portfolios.

Raising the price of carbon would help generate revenues to increase public revenues in the future, she said.

"A substantially higher carbon price is needed to encourage climate-smart investment and to accelerate the shift to cleaner fuels and more energy efficiency," Georgieva said.

The IMF estimates that the global carbon price should rise to $75 per ton from $2 per ton currently to keep global warming under 2 degrees Celsius.

Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
COVID-19Future of the EnvironmentClimate CrisisEconomic Progress
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Winding down COVAX – lessons learnt from delivering 2 billion COVID-19 vaccinations to lower-income countries

Charlotte Edmond

January 8, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum