By Kristalina Georgieva and Tobias Adrian Sharing the risks between public and private sectors would direct a greater share of the world’s financial assets to climate projects. Climate change is one of the most critical macroeconomic and financial policy challenges that IMF members face in coming decades. The recent spikes in the cost of fuel and food—and the resulting risks of social unrest—underline the importance of investing in green energy and boosting resilience to shocks. It will require massive global investments to address the climate challenge and vulnerabilities to shocks. Estimates ..read more

By Tobias Adrian, Patrick Bolton and Alissa M. Kleinnijenhuis The world may gain an estimated $78 trillion over coming decades by making this energy transition. International negotiators can’t agree on how to phase out coal, in part because of opposition to carbon taxes, and now even countries that had been able to abandon the fuel are reversing that progress as the war in Ukraine raises energy prices. The most common concern about scrapping coal is that replacing it with renewable energy would be too expensive, but we show in new research that the economic benefits would far outweigh the cost ..read more

The arc of 2021, from tentative recovery to resurgent uncertainty, may feel like more of a circle for many around the world who are understandably weary of the pandemic and eager for a return to normal. But to monetary and fiscal policymakers—who could be forgiven for also feeling weary amid prolonged crisis—the year ended in a much different place, as many prepare to unwind unprecedented support. That normalization process will demand clear communications despite facing many unknowns. Interest in such policy challenges is reflected among our most-read 2021 blogs, with readers seeking insight ..read more

The past year has brought us new challenges even as the old ones persist. If anything, the ongoing pandemic has taught us to think differently about tackling the challenges and questions we currently face when it comes to big issues like climate change, gender equality, inflation and economic measurement. In this editor’s pick of 10 podcasts from the past year, we present (in no particular order) conversations with top thinkers on a range of topics and issues that we will continue to confront in 2022 and beyond. Jayati Ghosh on Unpaid Care Work: In this installment in our Women in Economics s ..read more

By Nico Valckx, Martin Stuermer, Dulani Seneviratne, and Ananthakrishnan Prasad Firm, market, and country level factors may weigh on metals production under a net-zero scenario. The clean energy transition needed to avoid the worst effects of climate change could unleash unprecedented metals demand in coming decades, requiring as much as 3 billion tons. A typical electric vehicle battery pack, for example, needs around 8 kilograms (18 pounds) of lithium, 35 kilograms of nickel, 20 kilograms of manganese and 14 kilograms of cobalt, while charging stations require substantial amounts of copper ..read more

By Lukas Boer, Andrea Pescatori , Martin Stuermer and Nico Valckx  中文, Español, 日本語, Русский Clean energy needs may cause years of high prices for copper, nickel, cobalt, and lithium under a net-zero emissions scenario. The world’s historic pivot toward curbing carbon emissions is likely to spur unprecedented demand for some of the most crucial metals used to generate and store renewable energy in a net-zero emissions by 2050 scenario. Prices could reach historical peaks for an unprecedented length of time—and even delay the energy transition itself. A resulting surge in prices for mate ..read more

By Kristalina Georgieva New IMF analysis shows gaps in ambition and policy needed to achieve emissions curbs that contain global warming. In 1785, Robert Burns reflected on how humanity has come to dominate our planet: “I’m truly sorry man’s dominion, has broken nature’s social union,”  he wrote. The Scottish poet’s words still ring true two centuries later. Man-made climate change threatens our planet’s ecosystem and the lives and livelihoods of millions of people. From the IMF perspective, climate change presents a grave threat to macroeconomic and financial stability. Now, the window o ..read more

By Fabio Natalucci, Felix Suntheim, and Jérôme Vandenbussche عربي, 中文, Español, Français, 日本語, Português, Русский Sustainable investment funds need to be scaled up to support a successful transition to a green economy The transition to net-zero greenhouse gas emissions requires unprecedented change by companies and governments, as well as additional investment of as much as $20 trillion over the next two decades. Strong fiscal policies, complemented by a broad range of regulatory and financial policies, will be necessary to facilitate the green transition. The world’s $50 trillion investment f ..read more

By Gita Bhatt In Ernest Hemingway’s novel The Sun Also Rises, a character is asked how he went bankrupt. “Two ways,” he answers. “Gradually, then suddenly.” It’s the same with climate change. The damage is becoming less and less gradual, and unless we take action, the world could suddenly reach an irreversible tipping point. We now know the problem is much worse than we once thought. It requires not incremental change, but radical overhaul—roughly halving carbon emissions each decade through 2050. Getting there demands that we rapidly shift to renewables, build new electricity networks, i ..read more

By Davide Furceri, Michael Ganslmeier, and Jonathan D. Ostry Few issues have sparked more attention than how to avoid environmental and human catastrophe from climate change. But even in the wake of massive public protests and an ambitious agenda since the 2015 Paris Agreement, governments are wary of the political costs of enacting climate mitigation policies. In recent IMF staff research, we identify strategies that can minimize or even eliminate such challenges. In the first analysis of its kind, we combined information on the political aftermath (governmental popular support) of policy cha ..read more