This special issue of F&D on climate, in partnership with COP26, brings together a diverse range of voices from academics, policymakers, the private sector, and youth activists.
In Ernest Hemingway’s novel The Sun Also Rises, a character is asked how he went bankrupt. “Two ways,” he answers. “Gradually, then suddenly.”
It’s the same with climate change. The damage is becoming less and less gradual, and unless we take action, the world could suddenly reach an irreversible tipping point.
We now know the problem is much worse than we once thought. It requires not incremental change, but radical overhaul—roughly halving carbon emissions each decade through 2050. Getting there demands that we rapidly shift to renewables, build new electricity networks, increase energy efficiency, and embrace low-carbon transport. Cheaper renewable energy and technology advances make the move from carbon affordable and feasible.
This special issue on climate, in partnership with the UN Climate Change Conference (COP26), brings together a diverse range of voices from academics, policymakers, the private sector, and youth activists. It focuses on the urgent need for climate action and for different, mutually supportive climate policies.
Contributors, including Amar Bhattacharya and Nicholas Stern, identify concrete solutions that can generate massive opportunities for jobs and growth, driven by stepped-up infrastructure investment and technological innovation and supported by a dynamic private sector. The IMF’s Kristalina Georgieva recommends credible carbon pricing policies to encourage the use of green energy, while Harvard’s James Stock advocates a shift to sector-specific policies, such as low-carbon aviation fuel. For Mark Carney, UN special envoy for climate action and finance, private finance can help turn the billions of public money into trillions of total climate investment. He proposes ways to scale clean and green financial flows to emerging and developing countries—critical to supporting the transition in these countries.
We hear from policymakers. European Central Bank’s Isabel Schnabel suggests ways for central banks to act as catalysts for a more sustainable financial system. Maldives Environment Minister Aminath Shauna explains how she is taking a holistic approach to help her low-lying island nation adapt to climate change, ranging from actions to preserve coral reefs to improving waste management. And we highlight how two countries—Dominica and Finland—are pursuing innovative ways of coping with climate mitigation and adaptation, respectively.
No transition is easy. It will require compensating the workers and businesses that bear the cost of a green transition. It means breaking down political economy impediments to rapid progress. It depends on collaboration by citizens, governments, corporations, financial institutions, philanthropists, and the scientific community. Perhaps most important, it will require that world leaders expand their ambition and action, including mobilizing finance to help developing economies adapt to climate shocks.
But there is a path forward in what can become the inclusive growth story of the 21st century. If we rally to reverse the climate threat, then we may suddenly have a net zero world in view.
GITA BHATT, F&D editor-in-chief.
Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.
