Amar Bhattacharya, Maksym Ivanyna, William Oman, and Nicholas Stern
Climate change is a major threat to the sustainability and inclusiveness of our societies, and to the planet’s habitability. A just transition to a low-carbon economy is the only viable way forward. This paper reviews the climate change challenge. It stresses the criticality of systems changes (energy, transport, urban, land use, water) in a climate-challenged world, and the importance of infrastructure investment geared toward such systems changes. The key policies to enable the transition are: public spending on and investment frameworks for sustainable infrastructure, pricing carbon, regulations, promoting sustainable use of natural resources, scaling up and aligning finance with climate objectives, low-carbon industrial and innovation policies, building resilience and adaptation, better measurement of well-being and sustainability, and providing information and education on climate risks. Implemented well, climate action would unlock the inclusive growth story of the 21st century, making our societies more sustainable, inclusive, and prosperous.
International Monetary Fund. External Relations Dept.
help form a basis for its policy advice to member countries and for contributing to the international efforts to deal with these challenges.
A considerable amount of work on climate change issues is already under way at the IMF in coordination with its sister organization, the World Bank. This work comprises, among other things, an appendix in the October 2007 World Economic Outlook that summarizes the state of knowledge and policy debate on the key economic aspects of climate change.
IMF Research Department