" " Below:IMF ManagingDirector DominiqueStrauss-Kahnfrom shocks and make public finances morepredictable. Policymakers should explore someinnovative approaches. For example, countries mightbenefit from debt instruments with flexible repaymentterms, natural disaster insurance, or sovereignhedging instruments. The IMF is doing its part. One of our new facilities, the Rapid Credit Line -designed to deliver fast financing with limited policyconditions -can help countries suffering from shocks,conflict, or other fragilities. We are thinking aboutways to further enhance our support for shock-pronelow-income countries.CLIMATE FINANCINGWhen we talk about shocks, we cannot ignore climatechange. In fact, this could well be the shock to end allshocks. Unfortunately, it will hit low-income countriessoonest and hardest. Africa has contributed little to the carbon emissions that endanger our planet, but Africa is already paying the price. Without action, Africa will suffer more from drought, flooding,food shortages, and disease - possibly provokingfurther instability and conflict. We must take urgent action.Some may rightly argue that climate change is not in the mandate of the IMF and that it is the job of our colleagues in the World Bank and elsewhere. Butthe amount of resources needed has clearmacroeconomic implications - sustainable growth indeveloping countries will require large-scale, long-term investments for climate change adaptation andmitigation. The Copenhagen Accord suggests thatUS$100 billion a year is needed by 2020, over andabove existing aid commitments. This will be difficultto do with the standard approach - a series of"pledging conferences" for decades to come.This is why IMF staff is working on the idea of a"Green Fund" with the capacity to raise US$100billion a year by 2020. Let me be clear: the IMF doesnot intend to manage such a fund. Rather, theintention is to offer something that, we hope, can make a significant contribution to the globaldebate and for consideration by the internationalcommunity. And now is the time to put new ideas on the table, asthe United Nations High Level Advisory Group onClimate Change Financing - co-chaired by GordonBrown and Meles Zenawi - is about to begin its work.Much of this financing should come as grants orhighly-concessional loans. For this, we needsubsidies. Ultimately, these will have to come asbudgetary transfers from developed countries,drawing on scaled-up carbon taxes and expandedcarbon trading mechanisms. But these new revenue sources will take time to put inplace. So we need an interim solution. A "GreenFund" could provide a mechanism that could act as abridge to large-scale, carbon-based financing in themedium term. And IMF quotas could provide a key forburden sharing, to help overcome one of the obstaclesto an agreement.Launching such a scheme would entail a majorpolitical effort. But the potential pay-off is enormous- for Africa and the world. CONCLUSIONTransforming Africa's economy to boost livingstandards and increase resilience to shocks is a heftyagenda. Africa must take a leadership role, and Icommend the stance taken by African leaders,including here in Kenya, on climate change.Of course, the international community must also playits part. In our increasingly integrated world, aprosperous Africa is in everybody's interest. It is a two-way process.Good governance underlies all these endeavours. And good governance begins at home. Africans must put the common good ahead of parochialconcerns. At the same time, richer countries must not cave in to domestic political pressures at theexpense of future generations and poorer countries.They must resist the temptation to reduce aid, orengage in protectionism.These are serious challenges. But they are notinsurmountable. As Nelson Mandela once said: "Italways seems impossible until it is done." nThis article is excerpted from "Africa's EconomicTransformation - the Road Ahead", an addressdelivered by Dominique Strauss-Kahn, ManagingDirector of the International Monetary Fund, at theKenya International Conference Centre in Nairobi onMarch 8, 2010. For more information visit:www.imf.orgBIOGRAPHYDominique Strauss-Kahn assumed office as the tenthManaging Director of the International Monetary Fundon November 1, 2007. Prior to taking up his positionat the IMF, Mr Strauss-Kahn was a member of theFrench National Assembly and Professor ofEconomics at the Institut d'Etudes Politiques deParis. He was also a personal advisor to the SecretaryGeneral of the OECD. Earlier, Mr Strauss-Kahn servedas Minister of Economy, Finance and Industry ofFrance from June 1997 to November 1999. In thiscapacity, he managed the launch of the Euro. FINANCE057IMF STAFF ISWORKING ON THEIDEA OF A 'GREENFUND' WITH THECAPACITY TO RAISEUS$100 BILLION AYEAR BY 2020
ADAPTING YOUR BUSINESS WILL NOT COST THE EARTH058FINANCETIM FORD, CHAIRMAN, AND DAVID BEER, ASSOCIATE, ESOLVE PARTNERS LLPhe G8 Summit will be the first time Headsof State have met since COP15 inCopenhagen. The summit will be animportant event to keep the momentumto drive the global climate change agenda. There aremajor challenges to overcome both in terms ofachieving significant reductions in consumption as wellas selecting the best solutions from an ever increasingnumber of competing technologies. As December'sCOP16 in Mexico comes ever closer, the G8 will play apivotal role if it is to ensure success. The continuing development of the global economydepends upon embracing low-carbon initiatives and itis imperative the G8 members are at the forefront ofthis transition. Businesses have a key role to play. At atime when we are all trying to work our way out of theeconomic downturn, companies both large and small,must view the adoption of green initiatives as a fastand effective way to reduce costs and be more agileand competitive. The common misconception is that there is a high costto make these changes. This is not true. If you take theobvious environmental and publicity benefits out of theequation, the adoption of these initiatives still makesgreat business sense. A common challenge in the low-carbon economy is theability to create the right platform for start-ups andsmall businesses with innovative technology. Withmany banks still unwilling to provide finance, theseorganisations have to source private funding. The emergence of multiple competitive technologies inthe fields of waste-to-energy, biomass, solar, wind,wave and tidal power can be confusing and conflicting,whereas a cohesive approach delivering "best of breedoptions" may be more attractive and asmarter way to get to market. Far toooften, universities, project developers,inventors and scientists are vying forfunding from a limited investmentpool. The sheer volume of investmentproposals makes the selectionprocess much more difficult andcreates higher risk for the potentialinvestor, slowing the developmentprocess. Are we in danger ofconstantly developing potentialideas rather than deliveringactual results?Another major issue thatoften does not get the atten-tion it requires is the impor-tance of reducingconsumption. Thenumber of comp-etitive power gene-ration technologiescropping up across theglobe is increasing almostdaily, and whilst they generate anenormous amount of publicity, very little attention is paid to the infrastructure delivering power to the end user. The delivery grid systems in many countries simply donot have the scalability to manage increasing demand.The worldwide growth of renewable energy projects hassignificantly increased the need for utilities to captureand store electricity for later use. This is driven by several trends, including theproliferation of intermittent renewable energy sourcesT?