The Managing Director, International Monetary Fund (IMF), Ms Kristalina Georgieva, says climate resilience is a critical priority as climate change has become a fundamental risk to economic and financial stability.
She said this at the international Climate Adaptation Summit (CAS) 2021, hosted virtually by the Netherlands.
According to her, as the world aims to exit the COVID-19 pandemic and the economic crisis it has triggered, it must face a greater threat of a changing climate.
She said: “It is also an opportunity to reinvigorate growth and create new green jobs.
“Our research shows that combining steadily rising carbon prices with a green infrastructure push can boost global Gross Domestic Product (GDP) over the next 15 years by about 0.7 per cent and generate work for millions of people.
“This is why at the IMF, we embrace the transition to the new climate economy, one that is low carbon and climate resilient, that helps fight the causes of climate change and adapt to its consequences.”
To this end, she said that the IMF was placing climate change at the heart of its work by stepping up action in four key areas.
She added: “First, integrating climate in our annual country economic assessments – our Article IV consultations.
“In highly vulnerable countries we focus on adaptation and we are building up mitigation analysis, including carbon pricing, in our assessments of large emitters.”
She said that, secondly, the IMF was including climate related financial stability risks in financial sector surveillance through standardised disclosure of these risks, enhanced stress tests and assessments of supervisory frameworks.
Georgieva said that the third area was in scaling up climate in capacity development to help equip finance ministries and central banks with the skills needed to take climate considerations into account.
Fourthly, she said that the fund was mainstreaming climate indicators in macroeconomic data.
“We will launch a Climate Change Dashboard this year, with indicators to track the economic impact of climate risks and the measures taken to mitigate them,” she said.
The two-day event which began on Monday, January 25, 2021 convenes global leaders and local stakeholders.
It will see the inauguration of a comprehensive Adaptation Action Agenda that sets out clear commitments to deliver concrete new endeavours and partnerships to make the world more resilient to the effects of climate change.
By Folasade Akpan