Guest essay by Eric Worrall
In 1944, the International Monetary Fund was created by world leaders, reeling from the devastation of war and depression, to try to maintain global financial stability – to try to avoid a repeat of the mistakes which led to the Great Depression. But Christine Lagarde, the current head of the IMF, has a new vision; she wants the IMF to become involved in the anticipated $100 billion per annum climate wealth transfers to poor countries.
IMF’s Lagarde eyes subsidies, simple things to tackle climate change
Turning the tide on global warming should be tackled by big and small steps that range from cutting subsidies to riding bicycles, International Monetary Fund managing director Christine Lagarde said on Friday.
“Removing fossil fuel subsidies would go a long way to cutting consumption,” Lagarde said in answer to a question at Massachusetts Institute of Technology about how climate change can be addressed.
She had delivered a speech on how to promote growth in the face of an aging population and said that “game changers” including competition among insurers and raising the retirement age could go a long way to helping.
Speaking months after the end of the hottest year on record, Lagarde said “If subsidies were removed and carbon prices set properly now and taxed that would go a long way in addressing the climate change issues the world is facing.”
This change in direction has been facilitated by a change to the IMF mandate, which occurred in 2012, shortly after Lagarde was appointed as Managing Director.
From the IMF website;
The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.
The IMF’s responsibilities: The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
Read more: http://www.imf.org/external/about.htm
Given that Europe seems to be suffering a major banking crisis every other year, the Euro is in danger of imminent collapse, China might be on the verge of popping the greatest credit bubble in history, the Russian economy is crumbling, the Middle East is in crisis, and the USA, which is carrying an eye watering $19 trillion public debt, might be on the brink of a naval confrontation with China, you would think global financial stability should perhaps be receiving the undivided attention of at least one multinational agency.