On April 19, 2024, during the spring meeting between the International Monetary Fund and the World Bank, the IMF predicted that the Asia-Pacific region would grow by 4.5% in 2024, up 0.3 percentage points from the forecast in October last year. Asia's contribution to global growth is expected to reach around 60% during the same period.
When asked about the IMF's specific measures in the region's transition to low carbon and sustainable development, the IMF Asia Pacific Department responded that Asia's role in the global climate change challenge is critical. “As the biggest engine of global growth, Asia not only has some of the world's largest emitters, but also many large and small countries that are extremely vulnerable to climate change. The International Monetary Fund (IMF) is working to help these countries meet the climate challenge through policy advice, capacity building, and loan support.”
The IMF Asia Pacific Department said, first, that the IMF supports these countries in formulating and implementing emission reduction strategies, and emphasizes the need to exceed the goals in the “National Self-Determination Contribution” (NDC) to achieve the goal of controlling global warming to no more than 2 degrees Celsius. Furthermore, the IMF is also helping these countries resolve implementation gaps in emission reduction targets by implementing various carbon pricing mechanisms such as carbon taxes and the Emissions Trading System (ETS). The phasing out of fossil fuel subsidies is one of the key policies to achieve this goal. This not only helps set the right price incentives to attract investors to invest in renewable energy and low-carbon technology, but also provides targeted financial support to the most vulnerable groups.
Second, the IMF is also helping to increase attention to climate transition issues and carry out related analytical work to study ways to address climate finance barriers faced by countries in the region. These efforts include making climate-related financial mechanisms more transparent and accessible so that they can be better used to support climate action.
Finally, the IMF works with small countries, particularly Pacific island countries, to help them build the capacity to assess financing needs and develop effective strategies to adapt to climate change. In some cases, the IMF also provides loans to these countries through the Resilience and Sustainability Trust Fund (RST), such as Bangladesh, to support their climate adaptation and mitigation measures.
(Sina Finance North America Kang Lu interns Qian Letong and Wang Jiahui are from Washington)