What is it about?
The financial sectors in the Middle East and Central Asia (ME&CA) must support the climate policies in the region. While these sectors are at risk from the impacts of climate change, they also provide the funding for adaptation and mitigation strategies. In the years ahead, these financial sectors must employ plans to meet the climate challenge. In this paper, the authors present a roadmap for the ME&CA’s transition to a green future. This is the first report that discusses how climate risks affect the banking sector in the ME&CA. It also explores the role of insurance in reducing the impact of damages due to climate change.
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Why is it important?
There is a large gap in savings across the ME&CA. As a result, planning is crucial to correctly allocate funds in the region and reduce deficits in green investments. The report outlines steps to deliver financial stability in the ME&CA. It is necessary to increase readiness in countries with weak banking sectors. Countries with large oil revenues should invest in climate mitigation strategies. On the other hand, countries without oil reserves must strengthen their ability to make investments. The poorest countries should maximize how they can contain climate risks. They must also focus on containing climate risks and creating a financial sector that supports future investments. KEY TAKEAWAY: Two objectives should be met in the ME&CA financial ecosystem. In the near term, climate risks should be better understood and measured accurately. Over the medium term, energy subsidies should be phased out and market tools and incentives used to grow investments in green technologies. This research relates to the following Sustainable Development Goals: •SDG 13: Climate Action •SDG 9: Industry, Innovation, and Infrastructure •SDG 17: Partnerships for the Goals •SDG 7: Affordable and Clean Energy •SDG 8: Decent Work and Economic Growth
Read the Original
This page is a summary of: Preparing Financial Sectors for a Green Future, Departmental Paper, February 2024, International Monetary Fund,
DOI: 10.5089/9798400255250.087.
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Resources
SDG Showcase: Goal 13 – Climate Action
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SDG Showcase: Goal 9 – Industry, Innovation and Infrastructure
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SDG Showcase: Goal 17 – Partnerships for the Goals
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SDG Showcase: Goal 7 – Affordable and Clean Energy
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SDG Showcase: Goal 8 – Decent Work and Economic Growth
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IMF Climate Change Research Showcase
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Climate Change Research Showcase
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SDG Knowledge Cooperative
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