The International Monetary Fund (IMF) has pledged to create a new financial instrument called “the Resilience and Sustainability Trust” as its contribution towards mitigating the effects of climate change.
The Managing Director of the IMF, Ms. Kristalina Georgieva, announced this at the ongoing COP26 World Leaders’ Summit taking place in Glasgow, United Kingdom.
COP26 is the annual UN climate change conference. COP stands for Conference of the Parties, and the summit is being attended by the countries that signed the United Nations Framework Convention on Climate Change (UNFCCC) – a treaty that came into force in 1994.
“In my institution, the IMF, we work with vulnerable countries to help them assess their risks and put in place strategies to mitigate them.
“And most recently we have received support to create a new financial instrument—we call it the Resilience and Sustainability Trust. It will be there to provide long-term financing on concessional terms to vulnerable countries, small island states, countries affected by droughts and floods—so they can have the financial resources necessary to be strong in the face of climate shocks to come,” said the IMF boss.
She highlighted the need for policymakers to understand the vulnerabilities of their countries:
“Policy makers also have a responsibility to act. First, they need to have good assessments and those assessments need to inform investment decisions.
“They need to make sure that there are early warning systems, resilient infrastructure, social protection programs—so when families are hit, help is on the way. And I’m proud my institution is working in that regard.
“Second, they need to eliminate barriers to adaptation. There has to be access to insurance for everyone, and there has to be prohibition on excessive risk taking—so societies are better protected.
“And third, they need to provide incentives for the private sector to step forward and deliver climate resilient agriculture, smart cities—all the things that make us stronger in the face of climate change,” Georgieva added.
Amaka E. Nliam/IMF
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