The Unassuming Economist

From a speech by IMF Deputy Managing Director Zhang Tao at the United Nations Investor Summit on Climate Risk

“We recently have seen the IMF appearing to step up its work on climate change. Why now?

The Short Answer: This is our response to the threat climate change poses to our planet—and the growing demand from our membership and the international community to respond.

The IMF has been involved in the climate change work for several years. Our recent work reflects compelling evidence that adapting to climate change is one of the most important challenges facing economic policy makers worldwide. The IMF also has an obligation as a member of international community to address the doubts about climate change with fact-based analysis.

The Long Answer: the Fund’s core mandate is to ensure economic stability and resilience. Climate change could prove to be a destabilizing force for the global economy if it is not addressed.

The macroeconomic impact of climate change was illustrated by the especially damaging hurricane season last year in the Caribbean and the U.S. We certainly will see more frequent and more damaging such natural disasters in the future.

So, the key question is what we can do—and do better—in helping policymakers confront the challenges of climate change?

Two key areas of work are: mitigation, which includes helping countries meet their commitments under the Paris Agreement to reduce emissions; and adaptation, which focuses on building resilience to climate change. Our general message to our membership with regard to meeting the goals of the Paris agreement to contain emissions is to “price it right; tax it smart; and do it now.” ”

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