2 FINANCE & DEVELOPMENT | December 2019
EDITOR'S LETTER FINANCE & DEVELOPMENT
A Quarterly Publication of the
International Monetary Fund
ON THE COVER
Time is running out to save our planet, and everyone has a responsibility to act.
Illustrator Davide Bonazzi’s December’s 2019 cover likens the threat of climate change
to the closing jaws of a crocodile, shown in silhouette against a steadily warming earth.
Carbon calculus P.6
of green P.12
The adaptive age P.20
A New Climate
“EVERYBODY TALKS ABOUT the weat her, but nobody does anything about
it.” e quip, attributed to 19th-century America n humorist Mark Twain,
might describe the current state of play on clim ate change. In Twain’s day,
it was absurd to suppose humans could do anything about the weather.
Today, we understand that we can a nd we must.
e changing climate, largely wrought by humans, is bringing rising
sea levels, temperature ext remes, and more frequent and harsher storms.
ese threaten to displace l ives, livelihoods, and communities, with clear
economic consequences, often at a high price t ag, around the world.
Simply put, climate is the biggest risk t he world faces. What ca n we do
to move from talk to action?
is issue of Finance & Development looks at the economic and na ncial
impact of climate policy choices. It points to concrete solutions that oer
growth opp ortunitie s, driven by technologica l innovation, sustainable
investment, and a dynamic private sec tor.
For IMF Managing Director Kristalina Georgieva, dealing with climate
change requires not only mitigating damage, but also adapting for the future.
is means pricing risk and providing incentives for green investment. Kenneth
Gillingham shows that in the long run, the costs of climate action may be
lower than we think. Ian Parry estimates that aggressive carbon taxes would
help individual nations meet their emission-reduction goals and scale up action
globally. Mark Carney and others show how harnessing nance can open
enormous opportunities—from transforming energy to reinventing protein.
In this shared crisis, everyone has a responsibility to act. Ultimately, the
world’s fortunes and those of future generations depend on the ambition
and urgency with which leaders collaborate to address the global climate
But there is hope. Today’s young people, like Greta unberg and others,
serve as reminders of just how capable huma n beings can be of remak ing
the world. It is their future at stake.
GITA BHATT, editor-in-chief
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Gian Maria Milesi-Ferretti