If you hired a financial adviser and the first nugget of wisdom for you was "Stop being poor,” then you would probably fire that adviser. Oh, and meanwhile, the adviser’s family owes you a fortune. That’s a bit how developing nations should feel about the IMF at the moment.
The International Monetary Fund and World Bank held their annual meetings in Marrakesh, Morocco, recently. Ahead of those, the IMF released a paper arguing countries should balance fighting climate change — a pricey endeavor, at least at the front end — with avoiding debt. It may not seem like terrible advice, but it ignores some real-world complications.
For one thing, a key ingredient in the IMF’s secret formula for beating both climate change and debt is raising taxes, basically. The IMF suggests governments put a high price on carbon emissions to raise the revenue they need to address climate change without breaking the bank. Expensive carbon, along with other regulatory goads and incentives, will lure private financing and inspire companies to invest in reducing their emissions, the IMF says, sparing governments most of the cost of going green.