IMF calls on world to make green recovery from COVID-19

by BERNAMA/ pic by BERNAMA

ANKARA – Fiscal measures implemented by governments against the novel coronavirus need to be harmonized to combat climate change and ensure an environmentally sustainable recovery from the pandemic, said the managing director of the International Monetary Fund (IMF), reported Anadolu Agency.

“If this recovery is to be sustainable—if our world is to become more resilient—we must do everything in our power to promote a green recovery,” said Kristalina Georgieva.

Georgieva noted that taking measures now to fight the climate crisis is not just a “nice-to-have” but a must-have if we are to leave a better world for our children.

“When governments provide financial lifelines to carbon-intensive companies, they should mandate commitments to reduce carbon emissions,” she said.

Recalling the 2008 global financial crisis, she said some automakers committed to higher fuel efficiency standards then.

“With oil prices at record-low levels, now is the time to phase out harmful subsidies,” she said, adding governments need to prioritize investment in green technologies, clean transport, sustainable agriculture and climate resilience.

She highlighted that in the energy sector alone, the IMF estimates that a low-carbon transition would require an investment of $2.3 trillion every year for a decade.

Georgieva emphasized that the world should focus on using green bonds and other forms of sustainable finance.

“In light of the extended use of government guarantees, part of them can be deployed to mobilize private finance for green investment,” she noted.

Georgieva warned that a substantially higher carbon price is needed to encourage climate-smart investment and to accelerate the shift to cleaner fuels and more energy efficiency.

She noted the current global carbon price is only $2 per ton, way below the levels needed to keep global warming under 2 degrees Celsius, which the IMF estimated to be $75 per ton.