Mr. Ananthakrishnan Prasad, Ms. Elena Loukoianova, Alan Xiaochen Feng, and William Oman
Global investment to achieve the Paris Agreement’s temperature and adaptation goals requires immediate actions—first and foremost—on climate policies. Policies should be accompanied by commensurate financing flows to close the large financing gap globally, and in emerging market and developing economies (EMDEs) in particular. This note discusses potential ways to mobilize domestic and foreign private sector capital in climate finance, as a complement to climate-related policies, by mitigating relevant risks and constraints through public-private partnerships involving multilateral, regional, and national development banks. It also overviews the role the IMF can play in the process.
This Selected Issues paper on the Democratic Republic of the Congo (DRC) focuses on building resilience and exploring opportunities from climate change. Addressing the challenges associated with climate change in the DRC requires a good understanding of its exposure to climate vulnerabilities as well as the bottlenecks in scaling up climate policies to achieve its nationally determined contribution. At the same time, the global efforts to develop low-carbon technology and conserve carbon sinks put the DRC in a good position with substantial long-term benefit for the country. Hence, the country would benefit from focused efforts in strengthening forest and mining managements, while building resilience to climate change. Current logging policies have failed to prevent deforestation in the DRC. The DRC presents itself as a solution country for the diffusion of carbon-reduction technology. The advent of metals critical for the energy transition could strengthen the impact of global commodity cycles on external sector.
The report and its recommendations should also be careful to not impinge upon areas that are still unfolding, such as the RST, crisis response, and CD provision, to avoid unnecessary duplication of efforts and ensure that a coherent and evenhanded framework is in place. I offer qualified and/or partial support to the recommendations, as discussed below, to serve better our SDS members.
Mr. Sebastian Acevedo Mejia, Mr. Mico Mrkaic, Natalija Novta, Evgenia Pugacheva, and Petia Topalova
Global temperatures have increased at an unprecedented pace in the past 40 years. This paper finds that increases in temperature have uneven macroeconomic effects, with adverse consequences concentrated in countries with hot climates, such as most low-income countries. In these countries, a rise in temperature lowers per capita output, in both the short and medium term, through a wide array of channels: reduced agricultural output, suppressed productivity of workers exposed to heat, slower investment, and poorer health. In an unmitigated climate change scenario, and under very conservative assumptions, model simulations suggest the projected rise in temperature would imply a loss of around 9 percent of output for a representative low-income country by 2100.
Gail Cohen, João Tovar Jalles, Mr. Prakash Loungani, and Ricardo Marto
For the world's 20 largest emitters, we use a simple trend/cycle decomposition to provide evidence of decoupling between greenhouse gas emissions and output in richer nations, particularly in European countries, but not yet in emerging markets. If consumption-based emissions—measures that account for countries' net emissions embodied in cross-border trade—are used, the evidence for decoupling in the richer economies gets weaker. Countries with underlying policy frameworks more supportive of renewable energy and climate change mitigation efforts tend to show greater decoupling between trend emissions and trend GDP, and for both production- and consumption-based emissions. The relationship between trend emissions and trend GDP has also become much weaker in the last two decades than in preceding decades.