Special Drawing Rights
The IMF will seek to launch a new Resilience and Sustainability Trust (RST) in time for the Annual Meetings in October 2022. To start, the trust would make $30 billion available to low-income and vulnerable middle-income economies, as well as fragile island economies, IMF Managing Director Kristalina Georgieva announced this week at the Paris Peace Forum.
The new trust enhances the IMF's ability to provide long-term and low interest funding to countries in need. It will also be a way for wealthier countries to "rechannel" new additional Special Drawing Rights (SDRs) to countries that need them the most. Earlier this year, the IMF Board of Governors agreed to a historic allocation of the international reserve asset, injecting the equivalent of $650 billion in new liquidity into the global economy.
Rechanneling goals:Â The G20 has put forward a goal of rechanneling $100 billion of the SDR allocation from richer to poorer countries. Georgieva said the goal would be to build the RST up to $50 billion or more. The new trust would provide another vehicle for nations to rechannel SDRs beyond the existing Poverty Reduction and Growth Trust.
"Via this new RST instrument, the IMF can do significantly more to support policies for the once-in-a-lifetime transformation to the new climate economy—one that is low-carbon and, most importantly, climate resilient," Georgieva said in her statement.
Climate
(Photo: Petmal/iStock by Getty Images)
Transitioning to greener and cleaner forms of energy could spur unprecedented demand for copper, cobalt, lithium and nickel--metals used to generate and store renewable forms of energy. A surge in prices could create a boom for some economies but soaring costs could delay or derail the energy transition, Lukas Boer, Andrea Pescatori , Martin Stuermer and Nico Valckx write in a new IMF Blog.
Under a net-zero emissions scenario, booming demand for the four energy transition metals alone would boost their production value sixfold to $12.9 trillion over two decades, the authors found in new staff research.Â
High uncertainty: Uncertainty over demand, technological change and policy direction could hinder mining investment, raising prices and derail or delay an energy transition.
A credible, globally coordinated climate policy; high environmental, social, labor, and governance standards; and reduced trade barriers and export restrictions would allow markets to operate efficiently and direct investment. An international body with a mandate covering metals—analogous to the IEA for energy or the UN Food and Agriculture Organization—could also play a key role.
Read the Blog
COP26
 A Playbook of Pathways to 1.5-2 Degrees
The United Nations Climate Change Conference (COP26) concluded this week in Glasgow with the key takeaway that everyone needs to do more to take steps to limit global warming.
To keep warming to 1.5-2 degrees, we need to cut global emissions by 30-55 percent below business-as-usual levels by 2030. Under revised plans, advanced economies have committed to reduce emissions rapidly—with collective pledges of 43 percent below projected 2030 levels (up from 21 percent in 2015 pledges). Higher-income emerging market economies have together pledged a 12 percent cut (up from 3 percent in 2015), and lower-income emerging market economies, 6 percent (up from 4 percent).
The IMF has identified multiple pathways to keep warming contained. These are feasible, affordable and—arguably—fair, since they place a bigger burden of cuts on richer countries.
Want to know more? Download the new IMF Staff Climate Note: “Not Yet on Track to Net Zero: The Urgent Need for Greater Ambition and Policy Action to Achieve Paris Temperature Goals” Read our entire IMF Staff Climate Note series.
đź“ş Watch a short video explaining how prosperity is possible in a net-zero future.
F&D Magazine
(PHOTO: IMF PHOTO/RAPHAEL ALVES)
Maldives Environment Minister Aminath Shauna is fighting an existential battle against climate change for her low-lying island nation. The country lives and dies by the ocean that surrounds its 1,200 islands. It has built an economy on drawing tourists to its crystal blue waters. Those same waters continually threaten its population. In an "In the Trenches" interview, Shauna describe how the government is approaching adaptation measures and setting a good example of how even the smallest countries can make efforts to cut greenhouse gases.
Read the full article on the web or download a PDF.
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