The international monetary fund no longer wants to leave carbon business to the world bank: Its director Dominique Strauss-Kahn announced at the WEF the IMF was working on
a set of proposals to create a multi-billion dollar “Green Fund” that would provide the huge sums—which could climb to $100 billion a year in a few years—needed for countries to confront the challenges posed by climate change.
Given the great record of the IMF in devastating countries of the global south with structural adjustment programs, this can only be considered good news… (remember the financial crisis in Argentina, anyone? Or Somalia? That country used to have a coast guard that might have protected its fishing grounds from fishing vessels operating for european and japanese corporations – but when the IMF forced the Somali government to cut down public sector spending, the coast guard was effectively dissolved.
At least that probably clears any possible doubts as to how the industrialized countries want to finance climate change mitigation and adaptation: Far from repaying the historical debt they owe to the south, it’s rather new debts for the south towards the IMF…
There are three powerful arguments in favour of this proposal. First, the green fund could be self-financing or even profitable; very little of the IMF’s gold, if any, would actually be used.
Second, the projects will earn a return only if developed countries co-operate in setting up the right type of carbon markets.
And by the way, the IMF has found a simple solution to the whole climate change problem:
the politics are clearly very ugly. Let’s not forget, however, that much of the economics is simple.
It’s an externality, stupid—so price it
True. And so simple. Who needs justice or democracy when you can have a market?