Narrow Your Choices

Refine By Countries

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Political Science > Environmental Policy

You are looking at 1 - 10 of 21 items for :

  • Type: Journal Issue x
  • Natural resources x
Clear All Modify Search
Cover IMF Working Papers
Following the Money: Who is Keeping Coal Alive?
Gregor Schwerhoff and Mouhamadou Sy
The 2023 United Nations Climate Change Conference reinforced already existing pressure to transition away from fossil fuels, in particular for the most polluting source, coal. We use a comprehensive dataset on bank loans for coal projects to shed light on which type of banks continue to finance coal and how coal phase-out commitments affect coal financing. We find that coal financing is becoming increasingly concentrated, partly in banks with a very high coal exposure. We also find that many coal loans have maturities much shorter than the remaining lifetime of coal assets, thus exposing equity holders of coal assets to the risk of a more difficult loan rollover. An econometric analysis shows that countries with a strong commitment to coal phase-out, fixed in national law for example, receive less coal financing. Using an instrumental variable, we identify this effect as causal.
Keywords:
Coal; climate change; stranded assets; coal; divestment; United Nations climate change conference; Coal financing; phase-out commitment; coal financing; financing to the coal sector; Non-renewable resources; Financial sector development; Climate policy; Foreign direct investment; Asia and Pacific; Global; Europe; Middle East; Sub-Saharan Africa
Cover Staff Climate Notes
Policies to Foster Green FDI: Best Practices for Emerging Market and Developing Economies
Florence Jaumotte, Jaden Kim, Samuel Pienknagura, and Gregor Schwerhoff
Meeting COP28 goals requires a substantial increase in clean energy investment by 2030, including in emerging market and developing economies (EMDEs). Amid domestic financial constraints, foreign direct investment (FDI) could play a key role in EMDEs’ ability to close their renewable energy investment gap and finance green projects, more broadly. This Note finds that strengthening climate policies boosts FDI into renewable energy in EMDEs, especially in those with solar power potential, while less clear effects are found for FDI into EVs and green hydrogen possibly due to their recent emergence. Closing the average climate policy gap with respect to AEs could secure 40 percent of the private finance needed for renewable energy investment in EMDEs, helping overcome the impact of high financing costs. Strengthening the macro-structural framework, such as through improving trade and capital account openness and institutional quality, would also raise green FDI inflows, complementing climate policies. Case studies show that countries that attracted FDI into renewable energy put in place a large and diverse set of policies in the electricity sector, including those that secure a revenue stream for investors in the initial phases, such as power-purchase agreements/feed-in tariffs, renewables targets, and complementary investments. Countries that successfully attracted FDI into EVs relied on the development of national sectoral strategies including production and adoption subsidies, prior comparative advantage in the sector, and bilateral alliances with key players in the EV market. Finally, comprehensive national hydrogen strategies that leverage international efforts to boost production, and good conditions for production of renewable energy, were key drivers of green hydrogen FDI. Global initiatives such as the Just Energy Transition Partnerships and the EU strategy for green hydrogen are benefitting FDI to EMDEs.
Keywords:
Low carbon technologies; FDI; Climate Policies; Renewable Energy; Green Hydrogen; Electric Vehicles; IMF staff Climate note; green FDI; part of the International Monetary Fund; IMF analysis; FDI inflow; Foreign direct investment; Climate policy; Climate finance; Non-renewable resources; Global; East Asia; Europe; Africa
Cover Staff Climate Notes
Embedded in Nature: Nature-Related Economic and Financial Risks and Policy Considerations
Charlotte Gardes-Landolfini, William Oman, Jamie Fraser, Mariza Montes de Oca Leon, and Bella Yao
The economy is embedded in, and dependent on, nature. Yet economic activity is degrading nature at an unprecedented pace. Interacting with climate change, nature loss and transformation generates significant threats to the global economy and financial system. However, work on the implications of nature-related risks for macroeconomic and financial sector policies remains at an early stage. This note seeks to contribute to this emerging policy space in three main ways: (i) it proposes a conceptual framework for understanding nature-related risks by mapping out macroeconomic transmission channels, emphasizing their impact on the economy and financial systems through “double materiality;” (ii) it conducts empirical analysis, finding that nearly 38 percent of bank loans of the 100 largest global banks are to harmful subsidies-dependent sectors and 44 percent are exposed to conservation areas under the Global Biodiversity Framework, and that industries most exposed to nature degradation are not well prepared to manage these risks; and (iii) it discusses takeaways for macroeconomic and financial sector policies and frameworks.
Keywords:
nature; environment; macroeconomics; macroeconomic policies; financial stability; banks; nature-related risks; financial regulation; financial supervision; Minsky moment; ecosystem services; planetary boundaries.; IMF staff climate note; ecosystem service; biodiversity loss; biodiversity conservation; biodiversity hotspot; Environmental policy; Climate change; Financial sector policy; Natural resources; Global
Cover Climate Change Challenges and Opportunities in Latin America and the Caribbean
Climate Change Challenges and Opportunities in Latin America and the Caribbean

Abstract

The analysis in the book suggests that LAC countries are facing substantial challenges related to climate change but have tools at their disposal to seize the opportunities that the climate change presents. To maximize opportunities and minimize the risks LAC countries will need to improve flexibility and adaptability of their economies. Policies aimed at supporting the reallocation of labor and capital across sectors, investing in basic skills and human capital, improving transparency and economic governance to encourage investment in technology and know-how, and creating fiscal space to manage the climate transition would help LAC countries position themselves to take advantage of the opportunities afforded by the climate transition.

Keywords:
Climate; Latin America and the Caribbean; mitigation; adaptation; building resilience; IMF staff calculation; climate ambition; bank asset quality; financing climate policy; adaptation investment; Climate change; Greenhouse gas emissions; Climate policy; Natural disasters; Non-renewable resources; Caribbean; Central America; Global; South America; Middle East and Central Asia
Cover High-Level Summary Technical Assistance Reports
Islamic Republic of Mauritania: Climate Mitigation Policy Diagnostic
Diego Mesa Puyo, Zhiyong An, Thomas Benninger, and Nate Vernon
Mauritania requested capacity development from the Fiscal Affairs Department on carbon taxation, fossil fuel pricing and fiscal aspects of hydrogen development. This is a high-level summary of the technical assistant and the recommendations provided to the authorities. The report assesses options to gradually introduce a carbon tax to bring the country in line with its Nationally Determined Contribution for 2030 and net-zero pledge for 2050, including targeted support for vulnerable households. It then reviews approach to price fossil fuel products and proposes a revised methodology better aligned with international petroleum markets, along with a fiscally neutral smoothing mechanism to mitigate the impact of abrupt price changes on Mauritanian consumers. Finally, the report evaluates fiscal aspects related to the development of the low and zero-emissions hydrogen to ensure the country continues to position itself as an attractive investment destination without foregoing future revenue streams.
Keywords:
Carbon Pricing; Carbon Taxes; Fiscal Policy; Climate Mitigation; climate mitigation policy diagnostic; high-level summary; tax volatility; hydrogen development; price setting; Carbon tax; Fuel prices; Climate policy; Non-renewable resources
Cover Departmental Papers
The Energy Security Gains from Strengthening Europe’s Climate Action
Geoffroy Dolphin, Romain A Duval, Hugo Rojas-Romagosa, and Galen Sher
Following the 2022 energy crisis, this paper investigates whether Europe’s ongoing efforts to cut greenhouse gas emissions can also enhance its energy security. The global computational general equilibrium model analysis finds that individual policy tools, including carbon pricing, energy efficiency standards, and accelerated permitting procedures for renewables, tend to improve energy security. Compared to carbon pricing, sector-specific regulations deliver larger energy security gains and spread those more evenly across countries, benefitting also some fossil-fuel-intensive economies in Central and Eastern Europe. This finding strengthens the case for a broad climate policy package, which can both achieve Europe’s emissions-reduction goals and deliver sizeable energy security co-benefits. An illustrative package, which would cut emissions in the EU, UK, and EFTA by 55 percent with respect to 1990 levels by 2030, is estimated to improve the two energy security metrics used in this paper by close to 8 percent already by 2030. Beyond the policies analyzed in the model, the paper also discusses the technology, market design, and supply chain reforms that Europe needs for an energy-secure green transition.
Keywords:
Climate change; energy security; Europe; carbon tax; economic growth; emissions trading; greenhouse gas emissions; energy prices; diversification; technological change; climate policy package; Europe's Climate action; climate policy instrument; IMF Library; Imports; Climate policy; Non-renewable resources; Central and Eastern Europe; Global
Cover IMF Staff Country Reports
Czech Republic: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper analyzes inflation in the Czech Republic. The paper analyzes using an adaptive learning structural model. A structural model incorporating adaptive learning features is well suited to project inflation path in the Czech Republic. In Czechia, inflation expectations are notably shaped by past inflation outcomes, creating a feedback loop where rapidly decreasing inflation contributes to a shorter duration of elevated inflation, and vice-versa. Within this model, the central bank influences inflation through three channels. The first is direct-tightening policy reduces demand, lowers the output gap, and thus decreases inflation. The other two channels operate through inflation expectations. Tightening policy not only reduces current inflation but also impacts future expectations. Importantly, in contrast to perfect foresight-rational expectations models, the central bank can shape agents’ learning. Lower-than-expected current inflation leads to adjustments in how past inflation is perceived, influencing future inflation. The model suggests that the speed to reach the inflation target depends on the strength of the monetary policy stance.
Keywords:
decarbonization strategy; inflation in the Czech republic; green transition; financial conditions in Czechia; economy FCI; Inflation; Renewable energy; Non-renewable resources; Greenhouse gas emissions
Cover Staff Climate Notes
Energy Transition and Geoeconomic Fragmentation: Implications for Climate Scenario Design
Charlotte Gardes-Landolfini, Pierpaolo Grippa, William Oman, and Sha Yu
The transition to a low-carbon economy, which is needed to mitigate climate change and meet the Paris Agreement temperature goals, has been affected by the supply chain and energy supply disruptions that originated during the COVID-19 pandemic, the Russian invasion of Ukraine, and the subsequent energy crisis and exacerbation of geopolitical tensions. These developments, and the broader context of the ongoing “polycrisis,” can affect future decarbonization scenarios. This reflects three main factors: (1) pullbacks in climate mitigation policies and increased carbon lock-in in fossil fuel infrastructure and policymaking; (2) the decreasing likelihood of continuous cost reduction in renewable energy technologies; and (3) the likely intensification of macroeconomic shocks amid increasing geoeconomic fragmentation, and the associated policy responses. In this context, the note assesses the implications of the polycrisis for hypothetical scenarios used to assess climate-related financial risks. Following an analysis of the channels through which these effects are likely to materialize over short- and long-term horizons and some policy implications, the note proposes potential adjustments to the design of the climate scenarios used by financial institutions, central banks, and financial sector supervisors and regulators within their risk management frameworks.
Keywords:
Climate scenarios; polycrisis; climate risks; carbon lock-in; risk assessment; geoeconomic fragmentation; energy transition; energy security; disorderly transition; trade multilateralism; fossil fuel development; IMF staff climate note; IMF staff climate NOTE 2023/003; climate scenario; Renewable energy; Climate policy; Climate change; Non-renewable resources; Global; Central America; Caribbean