The race for climate subsidies from rich countries could harm emerging countries, fears the IMF

The race for subsidies from developed countries to encourage the development of green industries on their territories could “disadvantage emerging markets and the developing world”, warned this Friday in Davos the managing director of the International Monetary Fund (IMF).

“If we strive to green industrialized (countries) and we don’t think about emerging markets, we are all cooked,” said Kristalina Georgieva during a round table organized on the occasion of the meeting of the World Economic Forum in Switzerland.

The United States has implemented a plan involving billions of dollars in subsidiess for manufacturers producing batteries for electric vehicles or solar panels on American soil, in particular in response to China’s very aggressive subsidy policy. The European Union (EU), for its part, is trying to organize itself to help its industry in the face of the energy crisis and to deal with American and Chinese subsidies which risk causing some factories to flee from European soil.

“The key question is the climate first”

“My biggest fear is that something that, in principle, is great for accelerating the transition to a green economy by using public money to boost private investment (…) could serve emerging markets and the developing world “, asserted Kristalina Georgiava citing American and European policies. “If technology transfer is part of your plan, yes we will succeed” the international climate transition objectives, she however affirmed.

“The key issue is not China first, America first, or Europe first. The key question is the climate first, ”said French Economy Minister Bruno Le Maire during the same round table. The Minister, who wants Europe to further develop its public aid in response to US measures and is due to travel to Washington in February with German Economy Minister Robert Habeck, defended himself from any “protectionism”.

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