Thread by @UliVolz

Very pleased to have a chapter on 'The IMF and the Macro-Criticality of Climate Change' in this new @GDP_Center e-book edited by @KevinPGallagher & Gao Haihong.

A short thread. 👇1/

Download the e-book: bu.edu/gdp/files/2021…

I argue that the IMF ought to systematically integrate climate risks into its analytical & operational frameworks. As a starting point, the IMF’s macro models need to be significantly enhanced so they can be used to identify the main sources of macroeconomic & fiscal risks... 2/

...and assess the exposures of the private and public sectors to climate-related risks. This will provide a basis for designing tailored measures to mitigate such risks, while addressing potential trade-offs on sustainable development and inequality. 3/

Climate risks need to be systematically integrated into Article IV, FSAPs, and DSAs. The Fund can also play an important role by supporting climate vulnerable countries in climate-proofing public finances through technical assistance and capacity building. 4/

For background reading on the nexus between climate change and sovereign risk, see our recent @CSF_SOAS @ADBInstitute @wwfsg @427climaterisk report on "Climate Change and Sovereign Risk". 5/

doi.org/10.25501/SOAS.…

See also this recent paper with @SaraJaneAhmed on 'Macrofinancial Risks in Climate Vulnerable Developing Countries and the Role of the IMF – Towards a Joint V20-IMF Action Agenda' for @V20Group. 6/6

eprints.soas.ac.uk/34348/1/Volz%2… @GCAdaptation @InsuResilience