In the course of the last four years, finance ministries have increasingly been involved in the international concerning how to respond to climate change. The involvement has to a large degree been intertwined with the framing of climate change as a market failure and the diffusion of policies aiming at establishing a price on carbon emissions, for instance through the establishment of emissions trading systems and the removal of fossil fuel subsidies (as fossil fuel subsidies constitute a "negative price" on carbon emissions).
The “climate change as market failure” framing has underpinned global efforts to diffuse such policies. A crucial source of the diffusion has been the international institutions, in this case epistemic communities constituting of representatives from finance ministries and from International Organisations such as the World Bank and the OECD. Particularly the World bank and the OECD have played important roles in promoting such carbon pricing policies in both developing and developed countries through the “teaching” of the importance of such policies. This has especially been the case for the global effort to remove fossil fuel subsidies; an effort which originated at the G20 but today involves the World Bank, the OECD as some of the main drivers.
Such policy diffusion through teaching has only been possible due to the underlying norms emphasising economic rationality, cost-efficiency and the importance of correcting market failures. Finance ministries and other organisations which do not fully share the belief in such norms have been less inclined to participate in the diffusion of carbon pricing policies. Drawing on epistemic community literature, the paper will provide insight into how such communities can act as sources of policy diffusion, as well as into how “teaching” can function as a mechanism of policy diffusion.
