At the recently-held World Bank/IMF Spring Meetings in Washington, Minister of Finance Dr. Mohammed Amin Adam charged central bank governors to integrate climate risks and opportunities into monetary policies and financial regulation practices.
According to him, this has become necessary to fortify economies against climate-induced vulnerabilities and catalyse a transition to a green and climate resilient economy.
Dr. Amin said this at the V20 Finance Ministers and Central Bank Governors Working Group meeting at the World Bank/IMF Spring Meetings in Washington, where he doubled as Chair of the V20.
V20, or Vulnerable 20, refers to countries hit hardest by climate change and financial crises.
The meeting was an inaugural one of the group after its establishment in 2023, which brought together finance ministers and governors of central banks of the V20 Group chaired by Ghana.
Dr. Amin Adam underscored the connection between climate change and economic policy, warning that overlooking this linkage could result in severe consequences for countries.
Various topics discussed included climate risks and potential solutions, such as the implementation of a Global Shield Liquidity and Capital Facility (GS-LCF).
This facility aims to safeguard local economies from collapse following natural disasters by offering hard currency liquidity commitments through central banks and local financial institutions.
Among other things, the dialogue aims to build support across all stakeholders for official recognition by the IMF for V20 as an official inter-governmental group and build consensus on implementation opportunities of the climate prosperity plans.
Experts caution that as global temperatures are projected to approach a 1.5ºC increase in the coming decade, the most vulnerable nations will face increasingly dire consequences unless decisive action is promptly taken.
It is in this regard that the Finance Minister’s call is appropriate to forestall any eventuality in that regard. Climate change is with us whether we acknowledge it or not. What’s important is to put mitigating measures and policies in place to overcome risks associated with it.
Already, it is estimated that V20 countries have lost an estimated 20 percent of their wealth over the past two decades due to climate change, translating to roughly US$525billion. The most affected countries within the V20 have seen their economic growth cut in half due to climate impacts.
