The International Monetary Fund (IMF) is
planning a 100-billion-dollar fund to help countries mitigate the effects of
climate change, the agency’s head said.
“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 (WEF) in the Swiss ski
resort of Davos this weekend.
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 financial crisis.
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 capitalization 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 toward a greener
society.
Azim Premji, who chairs
India
’s Wipro corporation, noted that the issues of
tackling climate change and reducing poverty could be addressed together.
“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 sustainability.”
(from
E-Kathimerini)