The IMF’s turn on climate change

By Kevin P. Gallagher, Professor and Director of the Global Development Policy Centre at Boston University’s Pardee School of Global Studies, and Co-Chair of the ‘Think 20’ Task Force on International Finance to the G20

The International Monetary Fund (IMF) has recently pledged to put climate change at the heart of its work. A laggard to date, the IMF has to catch up fast to ensure that the world community can meet its climate change and development goals in a manner that doesn’t bring havoc to the global financial system. The IMF’s first test on climate change will be the extent to which it incorporates climate risk into this year’s reform of IMF surveillance activities. Given that these reforms will lock in for close to a decade, if the IMF doesn’t act now the consequences for prosperity and the planet will be grave.

Kristalina Georgieva has been a strong advocate of greening the financial system through her new post of Managing Director of the IMF, which she began in the fall of October 2019.  Unfortunately, she took office when the shareholder of the IMF with the most voting power, the United States, was led by a President who claimed climate change was a hoax. In the face of that pressure and to her credit, Georgieva steadfastly advocated for incorporating climate change into IMF operations and for a green recovery from the COVID-19 crisis even though her biggest patron made it difficult to put her words into action.

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