Reforming Bretton Woods institutions to achieve climate change and development goals

Nation-states will need to mobilize a stepwise increase in domestic resources and put in place a broad array of new policies in order to meet the targets set out under the Paris Agreement on climate change and the Sustainable Development Goals. To avoid the catastrophic social, economic, and ecological damages associated with climate change, nation-states across the world need to alter the structure of their economies to deliver economic growth and prosperity in a manner that is socially inclusive, low carbon, and resilient to climate and other external shocks. The Bretton Woods Institutions (BWIs)—the International Monetary Fund and the World Bank and other multilateral development banks—will need to play an important supporting and coordinating role in these efforts. This perspective outlines the scale of the financing challenge for developing countries and offers a series of policy reform proposals at the BWIs that can help align developing economy growth trajectories with climate and development goals.