Why the world needs an IMF for the climate crisis

(The Guardian, 4 Oct 2019) Just like after 1945, a new dawn of international bodies is required – this time to protect and empower the global south.

Human civilisation is facing a crisis on a scale that we have not seen since the second world war. We must finally respond in a way that meets this immense challenge.

The climate crisis is of our own creation, particularly that of the richest countries whose development has been based on exploiting natural resources without end. The casualties are piling up – some countries and entire communities, in particular island nations, are the most exposed and least prepared: after Hurricane Dorian, we have all seen the devastation in the Bahamas.

In the aftermath of the second world war, countries came together and created institutions that aimed to pursue justice and peace. The World Bank, the International Monetary Fund and the United Nations aimed to create a new world of multilateral cooperation. In the early days, newly decolonised countries attempted to shape these institutions to support their agendas but at every step these efforts were curtailed. By ceding to the power of certain dominant nations and multinational corporations, the World Bank, the IMF and the UN have ultimately exacerbated the climate crisis.

As our climate emergency unfolds with the economic and ecological instability that it wreaks, we need to again consider a host of new pan-national institutions to tackle this threat. The effects of the climate crisis will be most extreme for people in the global south. It requires massive investments, as much as an additional $2.5tr per year, according to the United Nations Conference on Trade and Development, which current financing and institutional arrangements appear unable to fulfil.

We would need to ensure financial stability and a mechanism for the transfer of resources through an international climate stabilisation fund – a sort of IMF targeting the climate crisis. This agency would put in place new fiscal arrangements to regulate global financial markets and corporate elites, especially those that have made vulnerable island and developing countries into tax havens or exploited natural resources. These nations now require the means to transform their futures. This body could seek to coordinate tax policies and disburse lost taxes to provide direct support to climate-exposed territories: encouraging productive diversification and tackling interconnecting inequality and displacement caused by climate change.

External link

The Guardian, 4 Oct 2019: Why the world needs an IMF for the climate crisis