Washington DC, 10 August 2022 (TDI): The International Monetary Fund (IMF) shared on Twitter about replacing coal with renewable energy and how it could pay for itself. Doing so will give a gain of 78 trillion by the end of the current century.

However, it is noteworthy that the international negotiators and stakeholders were not agreeing on how to eliminate coal in parts gradually.

This was due to the opposition to carbon taxes. Adding to that, the countries that have been able to leave the oil for reversing the steps to progress as the war in Ukraine causes an increment in energy prices.  

Moreover, one of the mutually important concerns about scrapping coal is its replacement with convertible energy, which would be unreasonably high. Regardless, the financial benefits will outweigh the disadvantages in terms of costs.  

IMF analyzes Carbon Arbitrage

In the same vein, IMF has also analyzed big carbon arbitrage because according to recent research, the cost of replacing coal with convertibles is more feasible. Also, this adds to the social benefits of the transition.  

Arbitrage is an investment strategy in which an investor buys and sells an asset in different markets simultaneously to profit from a price difference.

What’s more, the restraint to use coal extracts has come from avoiding the damage from climatic change, which will harm the people’s health. Moreover, estimates show that the world will produce a net gain of nearly 78 trillion dollars.  

This adds around a fourth to a fifth of global gross domestic product, equalling 1.2 percent of the yearly global financial output. 

IMF
+ posts

RELATED ARTICLESMORE FROM AUTHOR