April 12, (THEWILL) – The International Monetary Fund (IMF) has said it spends about $640 billion annually on climate-related initiatives across the continents as 44 countries await to be considered for various programmes.
The IMF also urged national governments to show practical commitment to climate matters to ensure that resources are deployed appropriately.
These disclosures were made by the IMF Deputy Managing Director, Bo Li, on Tuesday at the ongoing IMF/World Bank Group (WBG) Spring Meetings in Washington DC.
Li, who was the lead discussant in a scheduled seminar entitled “Climate Finance and Energy Security”, noted that the Fund had included climate matters in its planning strategies in the past two years.
The deputy IMF boss enumerated the role the Fund had played in tackling challenges of climate finance and energy security, adding that national governments must show evidence of practical commitment to the initiative.
Li noted that climate-related challenges pose a huge threat to long-term planning and prosperity, adding that it has a direct impact on the economic well-being of every nation.
He disclosed that the IMF had incorporated planning into every aspect of its operations in a way that impacted positively on developing the green energy initiative.
The IMF deputy boss said the Fund’s Executive Board had approved the first climate strategy for the institution in order to tackle every segment of the needed development.
“We incorporated climate considerations in every aspect of our operation, including surveillance, policy advice, capacity developing and lending,” Li said.
Giving further insight into why the IMF incorporated climate consideration in every of its development policies, Li said it was meant to ensure that the right technology was applied to each environment.
“In public investment management, we kicked off the first long-term instrument in the history of the Fund, which was a resilience and sustainability facility
“So far, we have approved five programmes to five countries. The demand is very high. We have 44 countries waiting.
“As climate becomes micro-critical, climate change could have long-term impact on balance of payment, and it could impact physical and macroeconomic policies.
“IMF spends about 640bn dollars a year across the world on climate (programmes). There is still a lot more to do.
“Despite the complexities, the IMF has shown huge determination to develop strategies on climate change,” Li said.
The seminar overview noted that the development strategies of our world have been put out of balance. While climate challenges continue to mount, the funding to fight them falls short amid growing need for energy.
The seminar further noted that as our traditional resources diminish amid unresolved crises, the world needs quick solutions to the challenges of climate finance and energy security.
It posed the following questions, among others: What is the answer to funding climate solutions and securing our energy future? In the transition to green energy, how can we ensure that funding gets to those who need it most and how can private financing help us get there? In this shifting landscape, what can we do to make the shift to a clean economy?”
The five panelists agreed that there must be increased commitment to climate financing and energy security among national governments across the continents.
The panelists observed that OVID-19 and geopolitics such as the Russia-Ukraine were negative disruptions.
They however agreed that solutions could be found through filling the gap between what the market needs and what the investors are providing.
The panelists also noted that solutions could be achieved through scaling up finance and by the international community working together to overcome the challenges of resources and geopolitics.
Decommissioning plants that use gas for electricity will avail more gas to be exported to Europe to address balance of payment impacts, the panelists said.
Concessional financing from bilateral sources such as the US and Germany as well as debt swap for climate action could be considered.
“There must be transparency on the part of the partners working on the projects. The countries with the excuse of not having implementable projects are now made to have implementable programmes.
“Transparency opens the appetite for more participation by member countries,” the panel agreed.
The seminar, which was moderated by Michelle Fleury, a BBC’s New York Business Correspondent, had Bo Li, Deputy Managing Director, IMF as the lead discussant. Others were Tim Gould, Chief Energy Economist, IEA; Kampeta Sayinzoga, CEO, Development Bank of Rwanda; Daniel Yergin, Vice Chairman, S&P Global’s SERAWeek Conference, and Rania Al-Mashat, Egypt’s Minister of International Cooperation.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
