Tuesday, April 16, 2013

Stern, Climate Change, and the IMF

Recently, there was an article by World Resources Institute (WRI) referring to a lecture given by Lord Nicholas Stern at a discussion between WRI and the IMF with the World Bank.

The economist Lord Stern is famous for his "Stern Review" outline the ecomonimc argument for climate change. At the meeting he said that his original report underestimated the effect of climate change. Lord Stern says that the obstacle to climate change is the lack of understanding in three areas: real risk of climate change, the benefits of an alternative pathway, and need for collaboration and mutual understanding.

Lord Stern is 100% right. But that is not the reason for this article. Rather, I object to the other participants -- the World Bank and especially the IMF. Yes the World Bank has made some progress recently, due in a large part to the new president of the bank who has come from the world of NGO's and not the financial world.

But the IMF! That is a joke. Just look at what they have been doing to Europe in the last six months. They have encouraged less control of the economy by the people and more toward big business without regards to the costs to the environment or to society (that is ordinary society, not the elite society).

For example, one item mentioned in the WRI article is that the IMF is opposed to oil subsidies. That is news to me! When the IMF discussed the poor US economy it made not one mention of the huge oil subsidies that the US spends. Nor has it made any mention of oil subsidies during the crisis in Europe. Indeed it seeems to support giving huge subsidies ("bailouts") to the banks which caused the problems in the first place.

Yes, I know that the IMF only gives loans to governments for building, "capital" and not for specific projects; however, it does require certain government policies. And as far as I know the IMF does not consider ennvironmental policy at all.