China's continuing reforms towards high-quality, sustainable, and balanced growth can help curb carbon emissions, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Thursday.
"Shifting away from investment-heavy to consumption-led growth, and supporting the expansion of services and high-tech sectors ... will reduce the energy demand and carbon intensity of growth, thus, making it easier to achieve your climate goals," Georgieva said in remarks to a high-level seminar on green finance and climate policy held by the IMF and the People's Bank of China.
Noting that carbon pricing is the most efficient and cost-effective approach to curbing emissions, Georgieva said China's existing coal tax could eventually be scaled up to curb CO2 emissions.
"China is also taking a major step forward by introducing a national carbon emissions trading system for the power sector," she said, adding the system can become "more comprehensive" by shifting the focus to a cap on total emissions and gradually adopting more ambitious targets over time.
Georgieva also said the global economic outlook is "starting to become sunnier" as the IMF recently lifted its global growth forecast to 6 percent for this year and 4.4 percent in 2022.
China's economy is expected to grow at 8.4 percent this year, and the fund projects that "China will contribute on average more than one quarter to global GDP growth through 2026," she said.
Georgieva urged countries to turn the pandemic-induced crisis into opportunity by "building greener and more climate-resilient economies," which would help realize a more sustainable and inclusive recovery.
A policy mix of carbon taxes and green investment stimulus could increase the level of global GDP in the next 15 years by about 0.7 percent and create around 12 million new jobs through 2027, she said.
The international community, the IMF chief said, also needs to step up to provide the climate finance and technology transfers that developing economies need to enhance their own climate efforts.