Avinash Persaud, 02 November 2021

To meet the Paris agreement, the world would have to eliminate 53.5 billion metric tonnes of carbon dioxide each year for the next 30 years. This column proposes a plan to meet the costs of this in an equitable way. Countries that contribute most to the stock of GHGs could issue an instrument that gives investors in projects anywhere in the world that reduce emissions the right to borrow from them at their overnight interest rates – which are currently near zero – and to roll over this borrowing for as long as the project delivers some minimum rate of reduction in emissions per dollar invested. Luckily, such an instrument already exists in the form of the IMF’s Special Drawing Rights.

Avinash Persaud, 17 March 2021

For the countries on the frontline in the war against climate change, there is a nasty nexus between climate change and debt. The cost of environmental damage, the loss of revenues from a natural disaster, and the high price of building back better all contribute to higher debt. This column proposes three ways to break this climate–debt nexus: (1) redistribute special drawing rights using a new classification of vulnerability; (2) incorporate natural disaster clauses into multilateral development banks’ lending arrangements; and (3) use the unused special drawing rights of the world’s strongest countries to recapitalise regional development banks to finance resilience in the vulnerable countries without adding to their debt.

Martin Skala, 20 April 2011

With discontent at the current state of the international monetary system still lingering, is there an alternative to the decades-old discussions about gold, Bretton Woods Systems, and Special Drawing Rights? This column claims there is. It proposes a new IMF reserve currency with the creation of Special Transaction Rights.

John Williamson, 02 October 2009

Do IMF special drawing rights have a role in international financial reform? This column argues that SDRs should play a large role in providing additional international liquidity, substituting for a substantial share of countries’ reserve currency holdings. It says that SDR allocation offers the surest way of reducing the inconsistency in payments objectives that currently looks to be the biggest obstacle to a strong recovery in the global economy

Owen Humpage, 08 May 2009

China recently called for SDRs to replace the dollar as the international reserve currency and diminish the US economic supremacy. This column argues that because of the huge network benefits associated with using dollars, SDRs are not likely to supplant the dollar anytime soon as an international reserve unit, especially with the euro as a more viable competitor.

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