30+ Groups and Academics Call on Yellen to use US government’s “voice and vote” to take bold action on climate at the IMF
WASHINGTON — In a letter sent today, 30+ organizations and academics from around the globe called on US Treasury Secretary Janet Yellen to use the US government’s “voice and vote” in the IMF to push for an end to support of fossil fuel expansion –including gas. The letter outlines proposals to advance just, green transition policies and debt relief solutions.
The call comes in response to President Biden’s January 27th Executive Order on Tackling the Climate Crisis at Home and Abroad, which instructs Treasury to “develop a strategy for how the voice and vote of the United States can be used in international financial institutions, including […] the International Monetary Fund, to promote financing programs, economic stimulus packages, and debt relief initiatives that are aligned with and support the goals of the Paris Agreement.”
IMF Managing Director Kristalina Georgieva has articulated the importance of ensuring a green recovery to support countries reacting to the twin global emergencies of the global pandemic and climate change. Despite this, the Fund is still playing catch up when it comes to addressing the risks that climate change poses to the global economy and financial system.
Analysis by the European civil society organization Recourse has shown that in a number of cases, the IMF supported the creation of new tax policies that subsidize coal and gas. A 2020 study shows that the IMF based projections about country growth rates, and associated debt servicing assessments, on assumptions about large future investments in coal and gas.
As a major shareholder in the IMF, the US government could restore its credibility on climate action by leading the IMF Board to end its role in the expansion of fossil fuels. The letter gives specific guidance on how to achieve this.
Organizations who signed the letter provided the following statements:
“With a continued financial support for fossil fuel expansion, the IMF contributes directly to an increase in global warming and more climate chaos to come. Now is the time for the US to walk the talk on tackling climate change by stepping in and helping to stop this destructive business as usual approach of the IMF.” says Andy Gheorghiu with Andy Gheorghiu Consulting (Germany).
“It’s simple: if the IMF intends to lead on climate, it has to stop supporting tax policies that subsidize coal and gas, and work on effective carbon pricing instead, as MD Georgieva has advocated. And the US should use its voice and vote in the IMF to be sure it follows through on this agenda,” says Ladd Connell, Environment Director at the Bank Information Center.
“The IMF is uniquely positioned to help countries address climate-related risks, increase resilience, and achieve a just recovery and transition. To begin, the IMF should stop being part of the problem in continuing to support subsidies for fossil fuel producers. The US government should use its “voice and vote” in the IMF towards these goals in order to restore credibility on climate.” says Luísa Abbott Galvão, International Policy Campaigner for Friends of the Earth U.S.
“The IMF has committed to helping lead in climate action, but its current financial policies say otherwise. The US has a strong voice in IMF deliberations and should push for this financial powerhouse to cease financial support for fossil fuel expansion. We have no time to waste in ending fossil fuel reliance, and cannot afford more expansion in non-renewable energy sectors.” says Zanagee Artis, Policy Director of Zero Hour
“Over the last few years the Fund has adopted strong rhetoric on the need to reverse the climate crisis. However its actions have not kept up. To preserve a habitable planet, the Fund must stop pushing subsidies and incentives for fossil fuels. The Fund also must avoid requesting governments to fiscally contract. Fiscal space is essential to address climate disasters and finance green economies and the care economy that the Fund promotes. Because harmful climate impacts expose and exacerbate gender inequalities, the Fund must holistically address joint climate-gender issues.” says Elaine Zuckerman, President, Gender Action
“With the changing times due to climate emergency which is a threat to development and poverty reduction efforts, the IMF ought to scale up its openness on progress to act on climate and environmental vulnerabilities and obligations. More so, on its portfolio of austerity measures that bond many countries to odious debts, unending poverty and environmental degradation,” says Kimbowa Richard, Programme Manager Uganda Coalition for Sustainable Development