The International Monetary Fund (IMF) on March 28 released a paper suggesting the creation of a “Green Fund,” with the capacity to mobilise resources worth 100 billion USD a year by 2020, to help developing countries finance the costs of combating climate change.
According to the paper, the Green Fund will probably use initial capital injected by developed countries in the form of reserve assets, which could include Special Drawing Rights (SDRs) - reserve assets created by the IMF.
The paper said that the contributors could agree to scale their equity stakes in proportion to their IMF quota shares, making these the “key” for burden sharing among the contributing countries.
Once its capital base is established, the Green Fund could begin to issue highly-rated and low-cost “green bonds” that would be sold to private investors as well as official holders.
The IMF and UN organisations who oppose climate change worry that developing countries do not respond strongly or efficiently enough to climate change issues unless they are provided with the necessary financial sources.
However, IMF economists say that the financial institution will not manage the Green Fund, leaving the job to the International Panel on Climate Change (IPCC)./.
According to the paper, the Green Fund will probably use initial capital injected by developed countries in the form of reserve assets, which could include Special Drawing Rights (SDRs) - reserve assets created by the IMF.
The paper said that the contributors could agree to scale their equity stakes in proportion to their IMF quota shares, making these the “key” for burden sharing among the contributing countries.
Once its capital base is established, the Green Fund could begin to issue highly-rated and low-cost “green bonds” that would be sold to private investors as well as official holders.
The IMF and UN organisations who oppose climate change worry that developing countries do not respond strongly or efficiently enough to climate change issues unless they are provided with the necessary financial sources.
However, IMF economists say that the financial institution will not manage the Green Fund, leaving the job to the International Panel on Climate Change (IPCC)./.
