IMF plans $100 b fund to help poor mitigate climate impact
The International Monetary Fund is planning a 100 billion dollar fund
to help countries mitigate the effects of climate change, the agency's
"The new growth model will be low carbon," Dominique Strauss-Kahn,
managing director of the IMF, told political and business leaders
meeting at the World Economic Forum in the Swiss ski resort of Davos
Efforts to deal with climate change could not be blocked "just
because we cannot meet the financing needs," he said.
Developing countries do not have the funds for these adaptation
measures, and developed countries' ability to pay is also limited as
they are now weighed down by debt after funds were used to deal with the
It was therefore necessary to "think out of the box" on the issue of
funding, the IMF chief said.
"We'll have to find innovative ways to finance it," Strauss-Khan said
on Saturday. "We're going to provide some ideas, built around a Green
Fund devoted to finance 100 billion dollars (72 billion euros) a year
which is the figure currently accepted for addressing the problem based
on the capitalisation coming from central banks, backed by special
drawing rights issued by the fund," he said.
Special drawing rights are an international reserve asset created by
the IMF in 1969 as a supplement to member states' official reserves.
They can be exchanged for common currencies.
The IMF said on its website that it would issue a paper detailing
ideas on how the fund would be financed.
The United Nations has said that governments should invest in the
green sector as they try to create new jobs in the wake of the economic
crisis, as it would also help move towards a greener society.
Azim Premji, who chairs India's Wipro corporation noted that the
issues of tackling climate change and reducing poverty could be
"To me, if you combine these two challenges, they present an
opportunity. The key is to look at the very fundamental fact that the
developing world has still to build most of its energy infrastructure
(and) physical infrastructure, and to buy most of its consumer goods,"
he said in remarks published on the WEF's website. "This very simple
fact - that the developing world does not have these things - is the
great opportunity for tackling climate change and ecological
Jamie Drummond, Executive Director of campaign group ONE which was
co-founded by U2 singer Bono, said the IMF's move for a green fund was a
"significant and positive development which, if approved in its most
positive form, could seriously help catalyse the financing of a
transition to low-carbon economic growth in developing countries."
However, the advocacy group said that large sums of financing are
still needed on top of the IMF fund to help poor countries deal with the
effects of climate change immediately.
"As the fund would give concessional loans this does not replace the
need for significant additional grant financing to help the poorest
countries adapt right now to the impacts of climate change," said the
The IMF's plans must be "urgently analysed ... and then the solutions
must be urgently implemented," it said.