International Monetary Fund (IMF) Director General Kristalina Georgieva said on Wednesday that countries should redirect direct and indirect subsidies, amounting to about $7,000 billion a year, away from fossil fuels to fight climate change, Reuters and Agerpres reported.

Speaking at the Davos Forum, Georgieva said total fossil fuel subsidies include $1.3 trillion in both direct government subsidies and indirect subsidies, including not putting a price on carbon emissions, adding that the price should reach $85 a tonne in in 2030.

A carbon price of just 25% of $85 per tonne would raise $800 billion in funding, money that could be used to fight climate change, while a price set at 50% of level of 85 US dollars per ton, will bring 1500 billion US dollars. , – Kristalina Georgieva said at the panel, which also included the President of the World Bank, Ajay Banga.

“What I’m trying to say is that we have to get resources, take them from where they’re hurting and put them where they’re helping,” Georgieva said. She added that the IMF includes emission reduction targets in macroeconomic policy discussions with major polluting countries, as well as climate adaptation targets with vulnerable countries.

At the same panel, Ajay Banga said that “the world cannot afford another decade of significant emissions growth” and lenders must act urgently to find ways to finance clean energy and pave the way for returns on investment from private equity.

“We can’t be the only ones doing all these projects and putting them on our balance sheet. Our accounts are limited,” Banga said. He added that the World Bank is taking measures to counter political risks, aiming to increase political risk guarantees to $20 billion a year in 2030 from the current level of six and a half billion dollars a year.

Uncertainties in the regulatory framework and exchange rate risks also hinder private investment in many countries’ energy transition, and the World Bank can help address some of these risks, Ajay Banga said. “These countries do not have sufficiently broad or deep enough hedging markets. Institutions like ours have to find a way to step in and close this loophole,” Banga added.