The IMF and World Bank’s View on the Fight against Climate Change

The IMF and World Bank’s View on the Fight against Climate Change

By E. Stanley Ukeni

As the central bankers and finance ministers from all over the world begin to converge in Lima, Peru, for the week long joint annual meetings of the World Bank and the International Monetary Fund, the contentious issue of the more than five (5) Trillion dollars that governments the world over give away in subsidies every year was once again a substantive topic of conversation at the deliberations in Lima, Peru.



Climate Change is undoubtedly a global problem that requires a concerted global effort in other to overcome this growing challenge that threatens our world. One solution to dealing with this seemingly intractable problem is to raise the cost of fossil fuel, and bring it to near enough cost-parity with the various renewable-energy sources. This increasingly feasible prospect seems to me a necessary initiative in the ongoing worldwide fight against Climate Change.

The World Bank and IMF generally hold their annual meetings away from their Washington DC headquarters every three years at a country of their choosing. It is interesting to note that the last time that such a gathering by the world’s leading lending institutions, for their joint annual meetings, in a Latin American country was in 1967, in Rio de Janeiro, Brazil. This year’s gathering is being hosted by the South American nation of Peru, and officially resumes on the 9^th – 11^th of October, 2015.

At a high level panel discussion involving the International Monetary Fund chief, Christine Lagarde, the World Bank president, Jim Yong Kim, U.N. climate talks’ executive secretary, Christiana Figueres, and economist and climate change expert, Nicholas Stern, the IMF chief pointedly cautioned that the failure of the international community to take decisive action against the real danger of global warming would be disastrous for humanity as a whole.

Christine Lagarde used the occasion of the panel discussion to passionately urged governments around the world to do away with their various subsidies on fossil fuel, which amount to more than 5 trillion dollars a year, in other to artificially hold down the real cost of energy. She equally recommended an imposition of carbon taxes on fossil fuel, as a means of raising the necessary funds needed to finance future clean energy replacement of current fossil fuel-reliant infrastructure.  

The World Bank president disclosed that his institution has been engaged, for years, in efforts to encourage governments around the world to remove fuel subsidies. He, however, acknowledged that political consideration had made it difficult for many governments to readily adopt unpopular sociopolitical policies that would invariably mean higher prices at the gas pump.

The two heads of the leading international lending institutions acknowledged that arriving at a universally acceptable global consensus on how to most effectively tackle the Climate Change problem is indeed a huge challenge.

This article is authored and published by E. Stanley Ukeni. Copyright © 2015. All Rights Reserved. This material and other articles or stories posted on this blog site may not be reproduced, published, broadcast, rewritten or redistributed, in whole or in part, without prior expressed written permission from the author, E. Stanley Ukeni.