April 22, 2022

Collin Rees, Oil Change International,
Kerry Skiff, Friends of the Earth U.S.,

New report finds International Monetary Fund must curb its support for fossil fuels

WASHINGTON, DC — The International Monetary Fund (IMF) and its shareholders are working at cross-purposes with their own stated climate commitments and goals by driving fossil fuel dependency in countries around the world through the institution’s lending, surveillance and capacity building activities. According to a technical brief released today from Oil Change International, Friends of the Earth U.S., Gender Action, Recourse, and urgewald, the IMF must stop undermining countries’ just transition away from fossil fuels in order to align with its own climate goals and shareholders’ climate agendas.? 

From supporting fossil fuel producer subsidies and incentives, to disregarding the financial and economic risks of fossil fuel investments and more, the IMF continues to lend credibility to and spur fossil fuel expansion around the world. The technical brief was released as the IMF wraps up its flagship Spring Meetings, during which the IMF Board of Governors makes decisions on addressing current international monetary issues and approving corresponding resolutions. The brief highlights the minimum approach necessary for the IMF to “do no harm” on climate.? 

“As many Global South countries face the worst debt crises we have seen in a generation and climate disasters at the same time, the IMF has a lot to answer for,” said Bronwen Tucker, Public Finance Co-Lead at Oil Change International. “The IMF has been a key architect in creating both of these situations, and it also holds the power to alleviate them.”

“The IMF has a significant amount of influence that could be used to further countries’ green transitions, yet the Fund is failing to step up,” said Luísa Abbott Galvão, International Policy Campaigner at Friends of the Earth U.S. “It’s time for the IMF to stop undermining climate action and follow the science. It’s time to end support for fossil fuels.” 

“During the decade since the IMF admitted that climate change, gender and other inequalities are macro-critical, its policy advice and loan conditions — for example pushing countries to finance fossil fuel-boosting subsidies, squeezing other public spending, and increasing regressive VATs — have undermined achievements in each of these spheres,” said Elaine Zuckerman of Gender Action. “Also by not treating macro-critical issues intersectionally, Fund activities do not address climate change’s disproportionate harmful impacts on women and sexual and gender minorities.” 

“While the IMF’s newfound commitment to climate change is laudable, the Fund’s greatest impact is through its influence over the 190 member states. The Fund needs to do more to support them to safely and fairly reduce fossil fuel dependence in time to avert climate change’s worst impacts,” said Sargon Nissan, International Monetary Fund programme manager at Recourse. “The IMF must transform how it conducts its lending, surveillance and advice to member states to underpin, not undermine, their climate transitions.” 

“A main area of IMF advice is on tax policy. However, most often the IMF gets its tax advice wrong by continuing to support or turn a blind eye to tax breaks for fossil fuels, such as IMF operations in MozambiqueSuriname and Mongolia,” said Heike Mainhardt, Senior Advisor at urgewald. “Investors will keep on investing in coal, oil and gas as long as the IMF continues to support fossil fuel tax breaks and other policies that make fossil fuels profitable.”