Previous IMF studies set forth the basic principle that getting energy prices right means setting taxes at a level that reflects health and environmental costs. A new, path-breaking study will be presented by Managing Director Christine Lagarde shows what this would mean in practical terms for 150 developed and developing countries across the four most widely used fossil fuels: coal, natural gas, diesel and gasoline. The new study finds that fossil fuels are widely and substantially underpriced, and that correcting these market failures in a manner that balances environmental benefits with economic costs offers large health, environmental and fiscal benefits.
Following the presentation of the key findings, CGD president Nancy Birdsall will discuss the implications of the IMF recommendations for development; World Resources Institute president Andrew Steer will describe how the new IMF study may change the international debate on policy responses to climate change. The event will conclude with questions from the floor.