Do the IMF’s structural adjustment programs help reduce energy consumption and carbon intensity? Evidence from developing countries

Although the number of countries under the International Monetary Fund’s (IMF) programs have increased considerably since the 1980s, a research gap exists in regard to the impacts of these programs on both energy consumption and carbon emissions in countries where the programs have been implemented. Hence, the purpose of this study is to understand and explain what is reasonable to expect of the IMF on energy and the environment. Given that the global roadmap for the energy transition calls for structural changes in favor of reducing carbon emissions, this study suggests that the IMF may have a special role to play, that is, working in tandem with national governments and environmental-related organizations to support resilient economic development models to implement this global roadmap towards the energy transition. The results based on panel econometrics models presented in this paper indicate that the IMF has not, to some extent, played such a role so far. More precisely, the results show that although IMF programs help reduce energy consumption, they do not change the energy mix or technological structures in a way that would reduce carbon emissions per unit of energy use. The findings of this study have important implications for energy and climate policymaking in developing countries.