Governments around the world should introduce carbon taxes now, and reap the double benefits of cutting greenhouse gases and increasing revenues, according to IMF chief Christine Lagarde.
The ABC reports that Lagarde made the comments at the annual meetings of the IMF and World Bank which are taking place in Lima, Peru.
"Finance ministers are looking for revenues. That's the fate of finance ministers," she said.
"But it's particularly the case at the moment because many have already used a lot of their fiscal buffers… and are always in need of some fiscal buffers in order to fight the next crisis."
She added that she favours carbon taxes over emissions trading schemes.
Meanwhile, as AFP reports, a group of 20 of the countries with the most to lose from climate change has held its inaugural meeting, also in Lima.
The group, calling itself the ‘V20’, briefly took the spotlight from the G20 which is scheduled to meet in Lima over coming days.
"We are low- and middle-income, least developed, arid, isthmus, landlocked, mountainous and small island developing countries," the group said in statement.
"Home to close to 700 million people — or approximately one in 10 alive today…. (And) we are united in our shared vulnerability and exposure to climate change."
Wealthy nations have pledged $US100 billion a year by 2020 to support developing nations deal with climate change. However, according to a report by the Organisation for Economic Cooperation and Development, last year they only came up with $US62 billion.
V20 chair, Philippine Finance Minister Cesar Purisima warned of the huge costs of not meeting the target.
"In the absence of an effective global response, annual economic losses due to climate change are projected to exceed $400 billion by 2030 for the V20," he said.
Nations included in the V20 include – Afghanistan, Bangladesh, Barbados, Bhutan, Costa Rica, East Timor, Ethiopia, Ghana, Kenya, Kiribati, Madagascar, the Maldives, Nepal, the Philippines, Rwanda, Saint Lucia, Tanzania, Tuvalu, Vanuatu and Vietnam.