Climate Change Is Shaking the Global Economy. IMF and WTO Demand a United Front. – Barron’s

“This crisis is already hitting us like a ton of bricks,” Kristalina Georgieva, managing director at the IMF, said about climate change.


The heads of the International Monetary Fund and World Trade Organization on Monday warned about the risk of inaction on climate change and called for broad collective action at a time when threats from extreme weather events are escalating around the world.

“We need to recognize that we live in a more shock-prone world. This is not just a blur and it’s going to go away. And the topic of this week, climate, this crisis is already hitting us like a ton of bricks,” said Kristalina Georgieva, managing director at the IMF, at an event for the opening of Climate Week in New York City. 

She added it was important to build resilience into the system. “This is not pie in the sky. We know we have got technology to do it, we know the money is out there to do it. We just need to muster the will and the decisiveness to act,” said Georgieva.

This week thousands of people are gathering in New York City for Climate Week, which brings together leaders in climate action from business, government, and the climate community, in conjunction with the United Nations General Assembly and the city of New York.  

The event is under way as devastating floods and droughts continue to batter the global economy. Hurricane Fiona roared into Puerto Rico on Monday, knocking out the U.S. island territory’s power while dumping torrential rain and wreaking catastrophic damage before making landfall in the Dominican Republic. 

Georgieva reaffirmed the IMF’s role in fighting climate change. “The IMF today is a systemically significant institution in the fight against climate change because climate change is a huge factor for macroeconomic financial stability, wealth and employment,” she said.

This month, Ngozi Okonjo-Iweala, director-general at the WTO, said trade policy would be key to boosting global climate efforts and mitigating the effects of climate change, especially on vulnerable countries. “I feel trade is part of the solution. You might have financing, but if the trade policies don’t align, you may not be able to get the technologies you need for climate adaptation,” she said.

According to a new multiagency report coordinated by the World Meteorological Organization, which is part of the United Nations, we are heading in “the wrong direction” on climate change.“

“Floods, droughts, heat waves, extreme storms and wildfires are going from bad to worse, breaking records with alarming frequency,” said U.N. Secretary-General António Guterres. “Heat waves in Europe. Colossal floods in Pakistan. Prolonged and severe droughts in China, the Horn of Africa and the United States.”

Petteri Taalas, secretary-general of the World Meteorological Organization, said we have “broken records” in the release of greenhouse gases, carbon dioxide, methane, and nitrous oxide. During the first half of this year, “we have already exceeded the emission levels of 2019 prepandemic levels,” Taalas said. He also noted that the sea level is rising at a faster level “Unfortunately, the sea level may continue to rise for the coming centuries because we already have a very high concentration of carbon dioxide,” he said.

He acknowledged the term global warming “is a little bit misleading” because some of the biggest impacts of climate change may be felt through water. 

“We have problems with drought. This is observed in large parts of the world and it’s going to get worse during the coming decades,” said Taalas. “And then we also have more humidity in the atmosphere thanks to the warming of the ocean. And that means when it rains, it rains more.” This was the case recently in Pakistan, where rainfall 10 times heavier than usual caused Pakistan’s devastating floods, according to the European Space Agency, which released satellite images of a vast lake created by the overflowing Indus river.

Write to Lauren Foster at lauren.foster@barrons.com


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