To address the threat of climate change, it is not only necessary to charge a price for carbon emissions, governments have to do much more, through actions to support innovation and diffusion of new, low-carbon technologies. The IMF simply assumes that climate policy consists of adjusting the price of carbon, when it states: “An effective mitigation policy must be based on setting a price path for the greenhouse gas (GFIG) emissions that drive climate change” (IMF, 2008, 4:2). Moreover, it apparently does not consider the problem as being so serious.