site.btaIMF Managing Director Kristalina Georgieva: We Need to Shift to New Type of Economy within a Decade

Within the current decade, the world needs to transition to a new type of economy based on lower carbon emissions and more adaptable to climate change, Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said in an interview with BTA at the United Nations Climate Change Conference (COP28) taking place in Dubai. 

Bulgaria is a country that has and will continue to have problems related to climate change. Its economy is still energy intensive, and this means it is more carbon intensive than other EU countries. We have some good schemes, for example on energy efficiency in housing; we have ideas, but we do not yet seem to realize that to be a competitive economy in the future, we need to be a green and digital economy. 

At COP28, it is finally becoming obvious that, on the one hand, time is not our friend, and on the other, the most important changes need to happen in emerging economies where emissions are rising, the IMF Managing Director points out. The financial system also needs to change, to become more flexible, she noted, outlining three necessary reforms: providing more long-term financing on concessional terms to finance the fight against climate change; using public funds to attract more private financing; and using guarantees and insurance mechanisms to achieve greater risk sharing. 

Nuclear energy is a sensitive issue, but without it, it would be difficult to reduce greenhouse gas emissions fast enough to meet climate targets, Georgieva said. She added that most international financial organisations do not have technical expertise in nuclear energy and therefore do not participate in financing such projects. However, there is likely to be more interest, especially in new technologies such as small nuclear reactors, because there is no other way, and in addition to the economic risks of climate change, there are also geopolitical risks of dependence on energy imports.

On the topic of fossil fuels and the consequences of their use, Georgieva says that with existing technologies that are already commercially viable, we can achieve 85% of the target emissions reductions by 2030. “This means that we have technologies 'for now', but for 2050 we will need technologies that are either in development or not yet invented. When these technologies are implemented, it is not impossible that we will naturally move away from coal and gas because there is a cheaper alternative,” she predicts.

"I am a technology optimist and I strongly believe that we humans are very resourceful. We will come up with solutions, the only problem is time," stresses the IMF Managing Director.