Action, caution needed on climate: IMF experts
IMF experts said on Friday that the global economy stood to benefit from action against climate change. However, they warned that aggressive curbs on emissions could jeopardize the recovery without careful planning.world Updated: Dec 04, 2009 22:33 IST
The International Monetary Fund (IMF) experts said on Friday that the global economy stood to benefit from action against climate change. However, they warned that aggressive curbs on emissions could jeopardize the recovery without careful planning.
Days before a major climate summit gets underway in Copenhagen, the experts at the International Monetary Fund said a global pact would help the world's poorest who face the worst effects of rising temperatures.
"Greater climate resilience can promote macroeconomic stability and alleviate poverty," Michael Keen and Benjamin Jones of the global lender's fiscal affairs department wrote in a staff position note.
But they also called for caution. They warned that sudden, large hikes in the costs of carbon emissions blamed for global warming could generate "unwelcome pressures on production costs and household incomes, thus dampening prospects for recovery."
In a conference call with reporters, Jones said there was a growing urgency to fighting climate change.
"But at the same time, many of the studies which emphasize the likely low cost of such measures tend to assume that the economy is functioning well. Well, clearly that's not the case in this current time," he said.
"The current weak economic climate probably argues for a broader coalition and a marginally less aggressive increase in prices," he said.
Global plans on climate change revolve largely around so-called cap and trade systems, in which restrictions on carbon emissions are meant to offer an economic incentive for countries and companies to go green.
More than 100 world leaders will take part in the talks in Copenhagen, which open Monday to work on a new treaty on climate action for after 2012 when obligations run out under the current Kyoto Protocol.
The United States shunned the Kyoto treaty, calling it unfair to rich nations by making no demands of emerging economies.
But President Barack Obama has shifted course and his allies in Congress are working on the first US cap and trade system, despite opposition from some members of the rival Republican Party who fear it will hurt the economy.