IMF wants to pass fossil subsidies to the climate crisis – 01/17/2024 – Environment

The managing director of the IMF (International Monetary Fund), Kristalina Georgieva, said this Wednesday (17) that countries need to transfer around US$7 trillion (R$34.5 trillion) used to combat climate change. annually to subsidize fossil fuels.

Georgieva told the World Economic Forum in Davos, Switzerland, that the total includes $1.3 trillion in direct government subsidies, as well as indirect subsidies such as not putting a price on carbon emissions. She also added that this fee needs to reach US$85 per ton of carbon emitted by 2030.

Pricing carbon at 25% of that rate would generate $800 billion in funds that could be used to reduce climate change, while a 50% rate would generate $1.5 trillion, she said during a climate panel that it was also attended by the president of the World Bank, Ajay Banga.

“So what I want to say is that we are going to bring resources, taking them from where they harm to put them where they help,” Georgieva said.

She added that the IMF was incorporating emissions reduction targets into its macroeconomic policy discussions with high-emitting countries and climate adaptation targets with vulnerable countries.

Banga told the forum that the world “cannot afford to have another series of decades of high-emissions growth,” and leaders must give more urgency to finding ways to finance clean energy sources and pave the way for private capital investment.

He added that the World Bank was taking steps to mitigate political risk, with the aim of increasing political risk guarantees to US$20 billion per year by 2030, from the current US$6 billion to US$7 billion.

Regulatory uncertainty and currency risks are also holding back private investment in the energy transition in many countries, and the World Bank can help absorb some of that risk, he said.