External publications

The IMF and the macro-criticality of climate change

Volz, Ulrich
External Publications (2021)

in: Kevin P. Gallagher / Gao Haihong (eds.), Building back a better global financial safety net, Boston, MA: Boston University, 108-118

Volltext/Full text

“At the IMF we recognize that the climate actions we take in our institution and globally are paramount for our future. We have embraced climate in everything we do.” — Kristalina Georgieva, December 2020

The International Monetary Fund (IMF) has only recently started to acknowledge that climate change may be a “macro-critical” factor, that is, crucial to the achievement of macroeconomic and financial stability, which is at the core of the Fund’s mandate. In 2015, the IMF identified climate change as an “emerging  structural  issue”.  In  November  2015,  then  Managing  Director  Christine  Lagarde  recog-nized that “[t]he Fund has a role to play in helping its members address those challenges of climate change for which fiscal and macroeconomic policies are an important component of the appropriate policy response” (Lagarde 2015: 1). Upon assuming office in October 2019, the IMF’s new Managing Director,  Kristalina  Georgieva,  acknowledged  the  centrality  of  climate  change  for  the  Fund’s  work:  “The criticality of addressing climate change for financial stability, for making sure that we can have sustainable growth, is so very clear and proven today, that no institution, no individual can step from the responsibility to act. For the IMF, we always look at risks. And this is now a category of risk that absolutely  has  to  be  front  and  center  in  our  work”  (IMF  2019).  Since  then,  she  has  reiterated  the  importance of climate change for the IMF’s mandate countless times.