Greenhouse gas emissions significantly increase in countries in the Global South within a few years after initially borrowing from the International Monetary Fund using structural loans, but not when more flexible lending conditions are involved.
However, with countries’ second or subsequent IMF loans, their emissions spike almost immediately, regardless of the lending conditions involved, a recent study suggests.
Structural loans, one of IMF’s two primary lending instruments, specify the precise changes borrowers are required to make to obtain the funds. By contrast, quantitative loans require that borrowers achieve quantifiable benchmarks – such as reducing their deficit by 5%, for example – but give them autonomy in deciding how they accomplish it, said study author Matthew Soener, a professor of sociology at the University of Illinois Urbana-Champaign.
Structural conditions impose coercive market constraints, reforms that pressure borrowers to increase their exports, indirectly raising countries’ greenhouse gas emissions through greater agricultural or manufacturing activities, Soener said.
“As a way to maintain growth and repay that loan, countries might decide, ‘Well, we can export more bananas, forest products or other agricultural products’ – or whatever specialty they might have,” he said. “In doing that, the country might be solving one problem, but they are causing another by increasing their greenhouse gas emissions.”

.jpg)


.jpg)


.jpg)

