Leaders of the International Monetary Fund (IMF) and the World Bank on Friday vowed to step up efforts to combat climate change by looking more closely at climate-related financial stability risk and using other tools at their disposal.
World Bank told finance officials from the Group of 20 economies that the bank, the biggest provider of climate finance to the developing world, would make record climate investments for a second consecutive year in 2021.
To get more bang for the buck in mitigation and adaptation, the World Bank is helping countries update their com mitments or “nationally determined commitments” under the Paris climate accord, he said during a videoconference.
The bank is also launching new reviews to integrate climate into all its country diagnostics and strategies, he said, with an initial focus on developing countries with the largest carbon emissions and the largest climate-vulnerable populations.
The Bank said it would work with the IMF and others on the reviews, and planned to complete up to 25 over the next year.
“A key focus will be to help countries achieve a just transition from coal to affordable, reliable, and sustainable en-ergy. We are also developing a framework for fiscal policy and sustainable growth, including carbon taxation and its redistributive impact,” it said.
IMF Chief, Kristalina Georgieva, told G20 officials she strongly supported a proposal by Italy, which is leading the G20 this year, on global climate risks and environmental taxation. “We will play our part in the areas … such as integrating climate in public revenues and spending policies, climate-related financial stability risks and data,” she said.
Georgieva told a climate summit last month that climate change posed a fundamental risk to economic and financial stability, but investing in green infrastructure could expand global economic output by an average 0.7 per cent annually over the next 15 years and create millions of jobs.
She said the Fund would also launch a new “Climate Change Dashboard” this year to track the economic impact of climate risks and the measures taken to mitigate them, a key step toward ensuring a needed shift to a low-carbon economy.
Malpass was reported by Reuters last week as saying that the Bank and the IMF were also looking at ways to factor climate change into negotiations about reducing the debt burdens of some poor countries hit hard by the coronavirus pandemic The Digital Currency Institute of the People’s Bank of China and the Central Bank of the United Arab Emirates have joined the Multiple CBDC (m-CBDC) Bridge, a cross-border payments project, the Bank for International Settlements (BIS) has announced.
According to a statement, “the m-CBDC Bridge initiative is run in partnership with the BIS Innovation Hub (BISIH), the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BoT).
It will further explore the capabilities of distributed ledger technologies (DLT) by developing a proofof- concept (PoC) prototype to support real-time cross-border foreign exchange paymentversus- payment transactions in multiple jurisdictions, operating 24/7. It will analyse business use cases in a cross-border context with both domestic and foreign currencies.”
It further stated: “The m- CBDC Bridge project will foster a conducive environment for more central banks in Asia as well as other regions to jointly study the potential of DLT in enhancing the financial infrastructure for crossborder payments.”
The aim of the project, which was initiated by the HKMA and the BoT under the name Inthanon-LionRock and renamed upon the accession of the BIS Innovation Hub Centre in Hong Kong SAR, the DCI of the PBC and the CBUAE, is to propose solutions and concepts to alleviate the current pain points in making crossborder fund transfers.
These include inefficiencies, high cost and complex regulatory compliance. Meanwhile the BIS has announced that it will hold its inaugural Innovation Summit on 22-25 March where central bankers, policymakers, business leaders and academics will discuss: “How can central banks innovate in the digital age?”