Speech

IMF Managing Director Georgieva’s Remarks to The Coalition of Finance Ministers for Climate Action Ministerial Meeting

October 12, 2020

As prepared for delivery

Thank you to Minister Briones and Minister Vanhanen.

It is a great honor and pleasure to be hosting this virtual meeting as head of the IMF.

Even while we are in the midst of the COVID crisis, we should mobilize to prevent the climate crisis.

As the Ministers have said: the evidence is clear: climate change is a profound threat to growth and prosperity. It is macro-critical. 

And macroeconomic policies are central to the fight against climate change. 

That puts Finance Ministers, and the Bretton Woods institutions in the front row of climate discussion. 

In our latest World Economic Outlook, we show policy tools can pave a road toward net zero emissions by 2050 even as the world seeks to recover from the COVID-19 crisis. 

We show that these policies can be pursued in a manner that supports economic growth, employment and income equality.

First, we are seeing unprecedented policy support – some $12 trillion since the start of the crisis – and countriesshould ensure that stimulus is targeted towards green investments. 

In the first 15 years of the recovery, this green infrastructure push can boost global GDP by about 0.7 percent on average and create millions of jobs. 

Second, carbon pricing should be at the heart of this strategy, as recognized in Helsinki Principle number 3. 

We know the economic rationale, but it is critical to get the implementation right, including to shield vulnerable people and sectors to ensure a just transition.

I would go further on carbon pricing. 

I fear that the current Paris framework is not going to deliver the needed reduction of emissions by 25-50 percent in the next 10 years. 

So, I am calling for the negotiations to be supported by agreement among the top emitting parties to adopt a carbon price floor.

With this price floor covering the majority of global emissions, it would provide clear forward guidance and a solid foundation on which to build global consensus on action to achieve the common goal. 

At the same time, we must recognize the climate crisis is already upon us and we ought to adapt and build resilienceto climate shocks. At the IMF we are working with our members – especially the most vulnerable countries – to do exactly that.

Let me conclude. Let’s not forget this is the Coalition of Finance Ministers for Climate Action – so we must deliver. We must all act today for a better tomorrow.