2023-10-02 20:39:08
Meeting environmental goals could be costly for large economies in the coming decades. This has been warned by the International Monetary Fund (IMF) in a report in which it points out that spending measures aimed at reducing emissions could trigger the public debt of large polluting countries by between 45% and 50% by mid-century. , which would lead said liability to “an unsustainable path.” Even so, the IMF has recalled that the economic costs of not doing enough would make that bill grow even more.
The warning from the organization, whose managing director is Kristalina Georgieva, clarifies that this risk can be “softened” with various mechanisms, such as carbon taxes. That is, applying new tax figures that penalize pollution. The Fund has described this instrument as “cost-efficient” in reducing emissions, while generating income that “relieves the burden of debt.”
At the same time, however, he admits that they are “frequently unpopular” measures from a political point of view, which leads – he admits – to a “trilemma” between meeting climate objectives, fiscal sustainability or pragmatism.
In addition, it maintains that the costs of financing the measures in rich countries could rise to 10%-15% of GDP by 2050 or, on average, an additional 0.4% in the annual primary deficit until that year. “Advanced economies with ample fiscal space are likely to be able to accommodate this policy mix.” Although other countries “will have to prioritize spending,” he adds, “eliminating fossil fuel subsidies, and increasing income to maintain debt sustainability.”
Precisely within the framework of the International Summit on Climate and Energy, which met this Monday in Madrid within the Spanish Presidency of the EU, the president of COP28, Sultan bin Ahmed Al Jaber, urged governments to triple the capacity of renewable energies and also to double energy efficiency until 2030.
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