In the midst of the annual Spring Meetings of the International Monetary Fund and the World Bank Group, the NY Times published an article on the “systemic risk” debt and climate change pose on the world economy, quoting the DRGR proposal.
As reported by Reuters, IMF Managing Director Kristalina Georgieva said “green debt swaps have the potential to spur accelerated action on climate change in developing countries”, announcing appropriate instruments by November.
After five years, the cumulative increase in real GDP associated with investments in green energy infrastructure is nearly twice as high as that on spending on non-ecofriendly energy. Findings like these highlight the importance of a post-COVID-19 sustainable recovery not only from an environmental but also an economic perspective.
According to a report launched by the Global Recovery Observatory only 18.0% of announced recovery spending can be considered “green” while just 2.5 % of total COVID-induced expenses to date had “positive green characteristics”. These findings once more stress the importance of the DRGR idea.
Kevin Gallagher is professor and director of the Global Development Policy Center at Boston University’s Pardee School of Global Studies and one of the co-chairs of the DRGR project. In the Financial Times he takes issue with the surcharges that the IMF adds to the interest and fees on its loans.