Climate policy at the International Monetary Fund: No voice for the vulnerable?

Abstract

The climate crisis prompted the International Monetary Fund (IMF), an international lender of last resort, to implement wholesale reforms to incorporate climate policy into its operations. At the IMF, selected countries from the Global North—historically the largest emitters of greenhouse gases—dominate decision-making. This raises several questions. Can the Fund implement an ambitious and effective climate policy? How are climate-vulnerable developing countries and their interests represented in everyday decision-making at the institution? Drawing on scholarship on the political economy and legitimacy of international organizations, we focus on the formal distribution of decision-making power within the IMF to evaluate the IMF's shift toward climate change. Our empirical analysis of the representation of 57 self-identifying climate-vulnerable developing countries (the V20) at the IMF and within its Executive Board shows that these countries, speaking for almost a third of the Fund's membership, command a vote share of merely 5.6%. Our assessment of the Climate Strategy adopted by the IMF amplifies equity concerns over its climate policies and further attests to the disregard of requests by developing countries. Barring meaningful governance reform to increase the voice and representation of climate-vulnerable developing countries, the IMF's approach to addressing climate change is unlikely to translate into legitimate and effective climate policy.