Countries in the Minority World that have made the most substantial contributions to the climate emergency must accept that they should also make the most significant contributions to its solutions. It is reasonable and right that governments in the Minority World should assume responsibility for their actions and make amends. Indeed, it is only fair and decent that they do so after centuries of robbing the Majority World.

This chapter reviews the legal debates surrounding climate finance. The UNFCCC and the Paris Agreement both declare that developed states ‘shall’ provide financial support to promote adaptation and mitigation in developing countries, but neither treaty specifies the form, or the amount, of such support. This chapter discusses various views on whether there is a legal obligation resting on certain states, or perhaps on a collective of states, to provide financial support to developing countries—and, if there is, what it might consist in and which legal principle it might be founded on.

Chapter 4 on ‘decarbonisation’ argues that the ways that the China Development Bank and the Nordic Investment Bank function to tackle the crisis of climate finance bolsters their credibility and persistence within class-divided society. These public banks are scaling up financial capacity, directing it towards decarbonisation and environmental sustainability, and developing accountable floors for green funding decisions in ways that can inform needed debate on what pro-public green & just public banks should be like. However, neither are without contradictions. Despite committing substantial resources to combatting climate change, the China Development Bank and the Nordic Investment Bank also fuel it by disproportionately funding otherwise carbonising economic activities, exposing the green and growth contradictions of global financialised capitalism.

The chapter describes what climate finance is, how it over the past ten years has increased in importance both within climate negotiations and in the implementation of climate policies, and the key issues of contestation in this regard. The chapter includes an outline of the cognitive debate regarding what kinds of financial flows can be defined as climate finance, followed by a discussion of the key normative issues of contestation in climate finance discussions. The following section focuses on equity versus efficiency regarding the generation and allocation of climate finance. Finally, the most important groups of actors (beyond the G20, the OECD and the IMF) and their roles in climate finance are discussed.

This chapter summarises the main findings of the book: international economic institutions address climate issues through economisation, yet there are differences in how exactly this economisation defines the issue at hand, differences mainly shaped by the institutional worldview of the institution and to lesser degrees by the relationship with member states. The differences were mitigated by the interaction between the institutions. The institutions were more influential regarding fossil fuel subsidies than regarding climate finance. This is due to fossil fuel subsidy reform resonating more with domestic actors than climate finance due to its positive fiscal impact (unlike climate finance that constitutes expenditure) and closer fit with neoclassical economics. These findings are discussed in the wider perspective of economic institutions and climate politics, arguing that economisation does not lead to a paradigm shift away from established practices of environmental politics. Furthermore, the economisation of climate finance and fossil fuel subsidy reform does not necessarily entail an overarching paradigm shift within the institutions, which continue with unsustainable practices such as political and economic support to fossil fuel production and consumption.

The introduction outlines how international economic institutions increasingly are involved in climate politics, why this involvement matters and why it makes sense to describe it in terms of economisation. Specifically, the chapter outlines the concept of economisation and how it consists of framing an issue as an economic issue as well as enabling economic institutions to address the issue. The book uses economisation to understand the G20, OECD and IMF’s respective output regarding fossil fuel subsidies and climate finance respectively, as well as the factors that shape this output and the consequences of the output at the international and domestic levels. Subsequently, the chapter outlines the relevant literature on climate governance and international institutions/organisations, and identifies the contribution of the book to these bodies of literature. Next, the chapter explains why it makes sense to select the cases of climate finance and fossil fuel subsidies, which are both characterised by economic institution involvement, while the relationship between their impact on state budgets and on the environment pulls in opposite directions. The section proceeds with why the selection of the G20, OECD and IMF is academically relevant. The following section outlines the use of data sources and methods in the analysis.

The G20 has addressed climate finance from the attempt to reach an agreement in 2009 to the more technical working groups that have addressed climate change from an economic perspective. This perspective entails stressing cost effectiveness, the economic consequences of climate change and addressing climate change with economic instruments. Its consequences were most pronounced on the international level and particularly the UNFCCC and the industrialised countries’ commitment to mobilise 100 billion dollars in climate finance, as well as on institutions tasked with providing analysis to the G20 the World Bank, the OECD, the IMF. The consequences on the domestic level are less discernible. The G20 output on climate finance has been shaped by entrepreneurship from Presidencies, membership circles, interaction with the UNFCCC.

The OECD has worked with climate finance since the 1990s, addressing it from both a development and an investment perspective. As a knowledge-producing institution, the OECD has produced numerous reports and other publications on climate finance, which can be divided into two strands: A development strand within which the DAC has published statistics on the provision of development aid with climate objectives, and an investment strand producing analyses of how to redirect investment to green purposes. The former perspective led the OECD to frame climate finance as a subtype of development finance while stressing its economic aspects (cost-effectiveness, leveraging private finance). The latter, less important, perspective framed climate finance as an instrument for redirecting investments from 'brown' to 'green' and linked it to fossil fuel subsidy reform, carbon pricing and institutional investment policy. The OECD’s approach had an ideational influence on how both the G20 and the OECD member states addressed climate finance. The OECD’s output on climate finance was shaped by institutional interaction, the OECD worldview and the member states. The chapter finds that the consequences of OECD output at the international was most salient regarding the UNFCCC, and at the domestic levels most salient regarding the development strand.

The IMF has not traditionally paid much attention to climate finance, but started publishing reports on climate finance from 2010. Nonetheless, the IMF output on climate finance provides an important insight into the case of economisation. The chapter starts with an outline of the IMF’s relatively limited output on climate finance, which initially focused on the mobilisation of climate finance and later more broadly on fiscal policies. The way in which the IMF linked climate finance to fossil fuel subsidies and carbon pricing is indicative of its view that climate change is best addressed by pricing emissions. As is explained in the subsequent section, this approach is shaped by the Fund’s worldview and its focus on fiscal policy, and its initial impetus to address climate finance has come from institutional interaction and policy entrepreneurs within the bureaucracy. Finally, the IMF’s approach had identifiable direct consequences only on the international level, particularly on the G20.

All three institutions have framed climate finance in economic terms and stressed normative ideas such as efficiency. They have also linked climate finance to issues such as fossil fuel subsidies, carbon pricing, risk and investment to a larger degree than environmental institutions. Despite the overarching convergence between the institutions around addressing climate finance as an economic issue rather than an issue of environmental protection or global justice, the institutions also diverged on climate finance to some degree. The divergence is most notable regarding whether carbon pricing should constitute a source of climate finance, and to some extent also regarding how equity should be prioritised. Subsequently, this chapter explains this alignment in terms of economic worldviews and interaction pulling towards convergence. Divergence between the institutions has been driven less by fundamental differences in worldviews (e.g. between the OECD Development Directorate and the IMF) and the degree of autonomy from member states. Finally, the consequences of the output are described, identifying more significant (cognitive) influences at the international level than the domestic level, but also incentive-based influences from the OECD and the G20.