International Monetary System

Treasury written question – answered on 13th July 2021.

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Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

To ask the Chancellor of the Exchequer, whether he has made an assessment of how to utilise the UK’s Special Drawing Right allocation to make grant contributions ahead of the (a) autumn Comprehensive Spending Review and (b) COP26 climate summit; and if he will make a statement.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of using the UK’s Special Drawing Right allocation to increase grant funding for the United Nation’s Green Climate Fund ahead of COP26.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The IMF Special Drawing Right (SDR) is an international reserve asset designed to supplement the official reserves of IMF member countries. SDRs are allocated to members, including the UK, in proportion to their IMF quota shares. HMG therefore holds SDRs as part of the UK’s international reserves.

The UK strongly supports the proposed new $650bn SDR allocation and has urged its implementation by the end of August. The UK also strongly supports the G7’s ambition to significantly magnify the impact of the allocation to reach a total global ambition of $100bn to the countries most in need.

The UK together with other G7 members has called on the IMF to work quickly to explore a menu of options for the voluntary channelling of SDRs to further support health needs and to help enable greener, more robust recoveries in the poorest and most vulnerable countries. G20 Finance Ministers and Central Bank Governors have also committed to explore options to channel SDRs to support resilient, inclusive and sustainable recoveries.

As COP26 Presidency, the UK is committed to delivering climate ambition ahead of and beyond the conference, including strong efforts on emissions reduction and ensuring there is finance flowing for mitigation and adaptation globally.

The UK has committed to contribute £1.44bn to the Green Climate Fund from 2019-2023, which will support projects that reduce emissions and help people adapt to the impacts of climate change.

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