International Monetary Fund
Environmental mandate
The International Monetary Fund (IMF) was founded in 1944 to promote international monetary stability and cooperation. Its main functions include working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, as well as to reduce poverty around the world. In line with its mandate and expertise, the IMF is focused on the fiscal, financial, and macroeconomic challenges of climate change and related policies. In regard to environment, the IMF cooperates with the World Bank and other international organizations to develop a greater understanding of the interplay between economic policies and environmental issues.
Environmental activities
In line with its mandate and expertise, the IMF is focused on the fiscal, financial, and macroeconomic challenges of climate change and related policies. The Fund’s activities in regard to climate change include providing advice on emissions mitigation policies to member countries where climate change can have a significant impact on economic and financial stability.
It also aims to promote understanding of the difficult issues of international fiscal policy cooperation confronting the efforts to design a successor to the Kyoto Protocol, building on progress made at the 2010 UN Climate Change Conference in Cancun. IMF staff have also contributed to the debate on how to finance responses to climate change in developing countries.
Besides addressing climate change, there is also plenty of scope for reforming tax systems to better deal with environmental and other problems that can be a significant drag on economic growth, such as the health and productivity impacts of poor air quality, and severe congestion of major urban centres. IMF staff are working on guidelines to improve the use of fiscal instruments in this regard.
Regarding other environmental tasks, IMF staffs have analyzed subsidies on food and fuel products, including their effects on climate change. In the case of petroleum products, for example, reducing subsidies could considerably reduce greenhouse gas emissions in emerging and developing countries, while reducing projected fiscal deficits. IMF Staff are also involved in regular monitoring of fuel pricing policies in response to volatile international fuel prices. IMF is also involved in a study defining and measuring the concept of “green investment”, and explaining its recent trends.