The IMF should provide poor countries with USD 300 bn a year to finance the fight against climate change, Nobel prize-winning economist Joseph Stiglitz told The Guardian. Developing countries will need grants and subsidies equal to the US’ Inflation Reduction Act, Stiglitz said, calling for rich countries to support the creation of USD 300 bn of IMF special drawing rights (SDRs) annually to support poor countries’ green energy transition, the report reads. “When the time comes and we are frying and somebody says: ‘How do we get out of the frying pan?’, this [annual SDR allocations] is one way of doing so,” Stiglitz said. “Unless developing countries and emerging markets reduce their emissions, no matter what pieties we do in the US and Europe, we will get global warming,” he added.

What are SDRs? SDRs are an international reserve asset which can be used as a credit line and exchanged with hard currencies, the Guardian writes. The IMF issued a USD 650 bn tranche of SDRs in 2021 in response to the coronavirus pandemic and rich countries agreed to recycle some of their SDRs into special IMF funds to support poor nations, the news outlet adds.