Private equity firms are treating climate adaptation as a value creation tool rather than simply a sustainability issue, according to a paper from climate technology firm Unwritten.
Improving physical climate resilience across portfolio companies can help protect earnings, expand EBITDA and support stronger exit outcomes as traditional buyout strategies become less effective, according to the findings.
Operational disruption caused by climate-related events is becoming a financial risk for investors. Unwritten has estimated that unplanned downtime costs the world’s 500 largest companies almost $1.4tn each year.
The researchers have identified six operational areas where firms can improve financial performance while reducing climate-related risks. These include carrying out site-level risk assessments to improve insurance terms, reducing operational downtime through targeted adaptation measures, strengthening ESG reporting to help companies meet customer procurement requirements, improving supply chain resilience through diversified sourcing, using climate data to access more favourable sustainability-linked financing, and demonstrating climate resilience during vendor due diligence to support higher exit valuations.
Climate adaptation strategies could contribute to a 6-7% uplift in exit multiples by providing buyers with greater confidence in the long-term resilience of portfolio companies, according to the findings.
Many firms struggle to turn climate risk assessments into operational improvements because traditional fund-level analyses often lack the detail needed by portfolio company management teams. Differences in operational maturity, resource constraints and limited site-specific data have also slowed implementation.
To address these challenges, the firm has introduced a decentralised operating model through its cloud-based Unwritten Workspaces platform. The system aims to give portfolio companies access to site-level climate risk assessments. It includes assessments covering 18 physical climate hazards, AI-generated adaptation recommendations and automated data collection to accelerate the development of mitigation plans.
The report cited private equity firms Hg and Oakley Capital as examples of investors using ongoing climate risk assessments to monitor portfolio companies and support operational resilience planning.
“Our customers are increasingly engaging their deal teams and value creation colleagues in discussions about preventative investments that safeguard portfolio company revenues. Strengthening operational resilience to climate risks belongs firmly in the value creation plan” said Phillip Marks, CEO of Unwritten.
For several decades, Iran has devoted substantial financial, institutional and political resources to military expansion. It has invested heavily in supporting its regional partners, as well as in pursuing geopolitical influence across the Middle East.
Previously, the Islamic Republic has shown few signs of swivelling its resources toward fixing its ever expanding environmental problems.
And those problems are considerable. Around 11% of deaths and 52% of the burden of diseases across the country are attributable to environmental risk factors, according to the World Health Organization.
Excessive groundwater extraction has caused buildings and roads to crack and sometimes collapse. Iran’s capital Tehran is often ranked as having the worst levels of air pollution in the world. In 2025 local media reported 350 deaths caused by poor air quality within a ten-day period. Hospitals at the time reported rising numbers of cases of respiratory and cardiac complications across Iran.
Lake Urmia – once the Middle East’s largest saltwater lake – has dried out, leaving salt-laden dust plumes were capable of travelling hundreds of kilometres and even crossing national borders in less than 12 hours.
The peace agreement that is being hammered out between the US and Iran’s leaders could hand Tehran a significant financial asset. It may unfreeze Iranian assets in foreign banks that they were previously unable to access due to US sanctions. This will give the government access to billions of dollars. Iran is also now exporting millions of barrels of crude oil that had been held in storage during the conflict.
The question then is where will all this money be spent.
Many analysts suggest a massive reconstruction project is needed to rebuild damaged factories, roads, and other essential infrastructure. While it thought highly unlikely that Tehran will see environmental investment as its top priority, the approach could provide major economic benefits.
Iran is now using its groundwater far faster than it can be naturally replenished. As a result, major lakes and wetlands are drying up. Water shortages are undermining agriculture, and forcing some rural communities to leave their farms. Studies indicate that approximately 56,000 km2 (3.5%) of the country’s area is subject to land subsidence, caused by excessive groundwater extraction.
Air pollution imposes significant public health and productivity costs. This contributes to thousands of premature deaths each year, and reduces labour productivity through illness and absenteeism. Dust and salinity storms continue to hit many parts of the country. They damage crops and soils, increase respiratory disease, disrupt daily life, and make already vulnerable regions harder to inhabit.
Rich rewards
When a state destroys its basic natural resources, it is not merely experiencing an ecological downturn. Natural systems (water, soil, ecosystems) are the foundations of any country. Without them, a nation has severely undermined its long-term economic output: farms disappear, road and rail systems crack and break, and people struggle to live.
A peace dividend from the US deal could therefore present Tehran with a rare moment of strategic re-evaluation and a chance to fix its long-term environmental problems. A different approach could generate long-term value, economic stability and, potentially, improved public health outcomes.
A serious national investment, and reconstruction, programme needs to focus on repairing leaking urban water networks, restoring wetlands and forests that regulate water and reduce dust storms. It could also upgrade ageing water and energy infrastructure, and redesigning cities to better withstand drought, extreme heat, and air pollution. It would also create jobs and mobilise high-skilled labour across engineering, science, manufacturing and technology sectors. This would begin reversing decades of damage to the natural systems on which Iran’s economy depends.
Iran is struggling with extreme levels of air pollution.
What needs work?
Restoring depleted aquifers, rehabilitating degraded land and modernising water and energy systems would increase the economy’s capacity to produce goods and services while reducing the long-term costs associated with environmental degradation.
Iran should see environmental restoration as its most important long-term growth strategy. A national investment programme could be centred on modern irrigation networks, wastewater recycling and reuse. These alongside renewable energy, and ecosystem recovery, would be a massive economic engine.
More efficient water use would strengthen food security. Investments in infrastructure would continue generating economic returns long after the initial capital has been spent.
Legal caps on groundwater abstraction, and economic diversification away from water-intensive crops are essential. Improved irrigation and wastewater reuse plus adjusting water pricing to reflect scarcity would also help.
This approach could not only be a valuable peace dividend for the Iranian people, but also a massive economic boost. Those financial benefits may have some appeal to a government which has ignored many of these environmental problems for so long.
Stand under a big old tree on a sweltering afternoon and you’ll understand something city planners are only now starting to take seriously: that shade isn’t decoration. It’s doing a job.
Trees are cooling the block, catching stormwater before it floods the street, and scrubbing pollution out of the air a person’s actually breathing.
A new study, written by more than 60 scientists spanning dozens of countries, makes the case that most cities still can’t quite bring themselves to treat trees like the infrastructure they clearly are.
The team behind it is led by Manuel Esperon-Rodriguez from Western Sydney University and Bangor University, with Mark G. Tjoelker from Western Sydney University as senior author.
Trees need time to grow
You can plant a sapling in twenty minutes. Growing an actual canopy, the kind that meaningfully cools a neighborhood though, takes decades.
So when a mature tree comes down, a city doesn’t just lose a tree. It loses thirty or forty years of accumulated shade, habitat, and carbon storage, and there’s no fast way to buy that back.
And yet trees keep losing these fights. Developers clear them because it’s cheaper and faster and penalties for illegal removal are often too weak to sting.
City budgets tend to fund the planting photo-op but not the years of watering, pruning, and pest management that actually keep a tree alive.
The researchers want stiffer enforcement, real tax incentives for landowners who keep mature trees standing, and minimum canopy requirements written into law rather than left to goodwill.
They even suggest big infrastructure projects, the kind that usually flatten everything in their path, could be redesigned to grow canopy instead of erasing it.
Not every neighborhood gets the shade
Wealthy neighborhoods, almost everywhere researchers have looked, tend to be noticeably leafier than poor ones.
Meanwhile, it’s the low-income neighborhoods that usually catch the worst of the heat and the dirtiest air.
The trees, in other words, tend to show up exactly where they’re needed least.
Closing that gap takes more than a citywide average that quietly hides the worst blocks.
Greening neighborhoods without displacing residents
The authors want targets set neighborhood by neighborhood.
They also want the people who actually live there, including Indigenous communities, involved in deciding what gets planted and where – rather than having greenery imposed on them from a planning office.
There’s a warning too: planting lots of trees without a plan can trigger green gentrification, raising rents and pushing out the very residents the trees were meant to benefit.
The only real fix, the researchers argue, is tying tree policy directly to housing policy instead of treating them as two separate departments that never talk.
Trees barely show up in climate policy
Given how much trees do, it’s almost strange how absent they are from the major climate and biodiversity agreements that actually move money and political will.
The authors want that fixed, with urban forests written explicitly into national climate plans, biodiversity strategies, and the commitments countries make under frameworks like the Paris Agreement.
Money remains the sticking point. Estimates put the global price tag for nature-based climate solutions, urban forests among them, at well over $500 billion a year.
Most current funding covers the ribbon-cutting moment of planting a tree and stops right there, leaving the decades of upkeep that actually determine whether that tree survives unfunded and, often, forgotten.
The study points to newer tools like green bonds, biodiversity credits, and tracking programs such as Tree Cities of the World as ways to start closing that gap, rather than continuing to fund trees like a one-time expense.
Many cities fail to keep record of trees
Maybe the most surprising finding here isn’t political, it’s logistical. Plenty of cities simply don’t keep good records on their own trees.
Nobody’s tracking which newly planted saplings actually survive their first few summers, which species are struggling, or how unevenly canopy is spread across town.
Without that information, cities are essentially guessing whether their tree policies work at all.
The scientists push for cheaper, sharper tools, satellite imagery, AI-assisted monitoring, to close that data gap, especially for less rich cities.
City trees should be diversified
The team also flags a quieter risk: planting the same few species block after block. It looks tidy, but it’s fragile.
One well-timed pest or disease can wipe out an entire city’s canopy in a single outbreak.
Instead, the researchers argue that cities should diversify their tree populations. Non-native species can be included where they are well suited to a hotter, drier future.
At the same time, cities should continue prioritizing native trees while respecting the ecological and cultural context of each place.
An urgent problem
A city’s trees aren’t a nice-to-have thing that gets funded once the “real” priorities are covered.
They’re already doing the work of public health policy, climate defense, and neighborhood fairness, whether or not anyone’s paying for it that way.
The authors don’t treat this as a distant problem. Cities keep growing and heatwaves keep getting worse.
Thus, the decisions being made right now – about which trees get to stay standing and which neighborhoods get to keep their shade – will quietly decide how livable those cities feel for decades after the people making those decisions are gone.
A new global review argues passive cooling technology must become central to climate adaptation.
As temperatures rise around the world, air conditioning is saving lives. But a growing reliance on it is also placing unprecedented pressure on electricity grids, increasing greenhouse gas emissions and making cities even hotter.
Published in Nature Reviews Clean Technology, opens in a new window, the review examines the latest advances in passive cooling technologies, from emerging materials for radiative, evaporative and combined radiative/evaporative cooling to sophisticated solar control systems and personalised intelligent ventilation technologies that can help buildings shed heat without consuming electricity.
“Air conditioning saves lives and will remain essential during extreme heat,” he says. “But we cannot air-condition our way out of climate change. If every building depends entirely on mechanical cooling, we create enormous pressure on electricity systems while adding even more heat to our cities.”
As European cities experience some of their hottest recorded temperatures over recent weeks the question about how to keep populations cool is front of mind.Photo: Richard Vanlerberghe / Unsplash
Rather than replacing air conditioning, Prof. Santamouris and coauthor Dr Konstantina Vasilakopoulou from RMIT argue passive cooling should become the first layer of defence, with mechanical systems providing additional cooling only when required.
The review evaluates emerging innovative technologies, such as super-cool materials, combined radiative/evaporative coatings, sophisticated external shading systems and personalised ventilation, as well as known passive cooling technologies such as reflective cooling materials that release heat directly into the atmosphere and hybrid cooling systems that combine multiple passive approaches.
The buildings we construct today will still be standing in 2050 and beyond. They need to be designed for the climate they will experience, not the climate we had in the past.
Professor Mat Santamouris AM
Cooler cities, healthier communities
Beyond reducing energy use, the researchers say passive cooling can make cities healthier and more resilient as extreme heat events become more frequent.
Keeping buildings and neighbourhoods cooler can reduce the risk of heat-related illness, ease pressure on electricity networks during heatwaves and improve comfort for people who cannot afford to run air conditioners. Passive cooling measures can also help buildings remain safer during power outages, when mechanical cooling systems are unavailable.
Prof. Santamouris says the greatest benefits will come from combining passive cooling with efficient air conditioning, rather than treating them as competing approaches.
“There is no single solution to keeping cities cool. We need a whole-system approach that starts with climate-responsive building design, shading and better materials, then uses the most efficient cooling technologies only when they are really needed.”
The review calls for stronger building standards and planning policies that encourage climate-responsive design, alongside investment in technologies that reduce heat entering buildings and lessen demand on electricity infrastructure as cities continue to warm.
Designing buildings for tomorrow’s climate
Buildings designed today will need to withstand a much hotter climate over coming decades, says Prof. Santamouris.
“The buildings we construct today will still be standing in 2050 and beyond. They need to be designed for the climate they will experience, not the climate we had in the past.”
In order to achieve this governments should strengthen building standards, support passive cooling technologies and improve access to affordable cooling for lower-income communities.
Prof. Santamouris says these measures could deliver significant benefits for public health, energy security and climate resilience.
“Cooling should not be a luxury available only to those who can afford rising electricity bills. Better building design can reduce costs, improve comfort and help protect the people most vulnerable to extreme heat,” he says.
Action to address climate change can drive strong, sustainable growth. The state is central in setting the direction of change and mobilising investment and innovation to achieve it. But time is not on our side. Research to guide policy has never been more urgent; it must proceed alongside action.
The new growth story of the 21st century must be about sustainability and resilience, and with artificial intelligence (AI) at centre stage. It will be very different to the polluting and unsustainable models that so many countries have followed. Private investment will be at the core. But the role of the state will be critical in making it happen. The task of governments and public institutions is to devise comprehensive strategies, policies and institutions that can foster transformation across all economic sectors.
The role of the state must include setting incentives, aligning expectations and spurring innovation and entrepreneurship. It will be in the vanguard of system change, including in our cities, energy, transport, land and water.
This requires a clear strategic vision, tackling market failures and encouraging private investment in new areas. At the same time, it must manage the socio-economic and political challenges arising from dislocation and vested interests. And it must be aware of and avoid the dangers of government failure. In so doing, it must beware both market and institutional fundamentalisms.
These are ambitious tasks that require a renewed and effective state. This article outlines key dimensions of the state action that are needed to enable this growth story. Together, they form both a sense of direction and a research agenda. Because of the urgency, action and learning must go together. There will be mistakes along the way, but this should not be an argument for inaction. Delay is dangerous.
This is a time of crisis – and a new growth story is needed
Much of the global political landscape is currently divided. Across the world, there has been erosion of constitutional democracy. Some of this is related to the sluggish economic growth that the world has been experiencing, eroding living standards for many, undermining communities and leading to anger and discontent.
In this context, climate action has been characterised by many as an issue for elites. Yet it is not sustainability-aligned policy that has led the world to its current state. On the contrary, the lack of it has contributed to the difficulties. Climate inaction creates instability, migration and conflict. Climate action drives growth.
Transforming our economies towards sustainability can provide exactly what is needed to overcome the political and economic difficulties of the present: integrated, well-designed and well-implemented public policy and institutional structures that drive development through private and public investment, innovation and systemic change. Such actions can unleash the forces that will transform our economies, creating strong, sustainable, resilient and inclusive growth.
Climate action will drive the new world growth story. There is no inevitable trade-off between climate action and growth: the former drives the latter. And it is a much more attractive form of growth than the dirty and destructive models of the past.
Developing nations, where most of future growth and investment are set to happen, are at centre stage. In these places, most of the infrastructure remains to be built, the vast majority of the world’s renewable resources are concentrated and the investment needs are the greatest. Their cities can be built in different ways, choosing health and efficiency over pollution and congestion; their agricultural systems can combine local knowledge and AI to become smarter and less toxic; and their economies can leverage their clean endowments, potentially benefiting from a new world economic geography where abundant clean energy or the availability of specific minerals is a key asset.
Strong investments and innovation are necessary across the whole economy – see Figure 1 for five key climate investment areas. Such investment must reach all forms of capital, including physical, natural, human and social.
Clean energy investment drives development; natural capital investment underpins it; adaptation and resilience investment sustains it; and just transition investment makes change equitable, desirable and possible. This investment would strengthen demand, supply and efficiency in the shorter term; stimulate innovation and discovery, creating new investment opportunities in the short and medium term; and avoid the destructive impacts of climate change in the longer term. Carbon-intensive growth self-destructs; it is not a viable option.
Alongside the necessary increase in investment, the growth story comes from a number of key drivers (see Figure 1):
Lower costs and technological advancement, with the clean already being cheaper than the dirty across much of the economy, and innovation proceeding apace across most action areas.
Increasing returns to scale, shown by many new products and activities.
Increased resource efficiency, leading to higher productivity.
Reduced pollution, improving health, reducing mortality and increasing productivity.
Improvements in the key systems of cities, energy, transport, land and water – for example, cities where you can move and breathe are much more productive than those that are heavily polluted and congested.
AI can magnify these drivers, enabling green and intelligent growth (Stern et al, 2025). See The Growth Story of the 21st Century (Stern, 2025) for a further description of the drivers of growth.
Figure 1: Key investment sectors and growth drivers
The role of the state: five key areas for action
The role of the state as indicated above is crucial to the delivery of the growth story. It will chart a path, and thereby expectations, create the conditions for investments, steer action towards shared objectives and help to bring society together. The remainder of this article focuses on five key areas for state action. These are also priority areas for research, which must move quickly and alongside action. Time is not on our side.
National strategy and direction
Structural change at speed requires strong political support. The state must establish a clear direction and craft a compelling national vision and narrative. And it must act so that some of the tangible benefits of change are experienced directly and soon. It is crucial to foster a shared understanding that the transition is a growth story with sustainable and resilient investment at its core. This narrative both resists the separation of climate and development, and tackles misinformation.
There is no doubt that many challenges will arise, but the role of the state is to make practical choices to overcome them. The narrative should be one of hope, presenting climate policy for what it is: action with the objective of advancing development and wellbeing. It is about technological innovation, modernisation, efficiency, creation of job opportunities, industrial dynamism, resilience and more.
It is a narrative and strategy that highlight both the growth story that action enables and the immense curtailment of rights to and opportunities for development that inaction causes. By creating a hostile environment, climate change can erode fundamental human rights, such as access to food and health, and damage economic and human development across the board. The argument should also embrace a discussion of what is ethical and responsible in relation to future generations and others in the current generation (Stern, 2026).
A core task in generating change and building support is the tackling of key market failures (Stern, 2022), thus reframing incentives and helping to create the conditions for the required investment flows. These market failures, which are many and interwoven, must be tackled together in complementary ways.
A narrow understanding of market failures, highlighting only the externality from greenhouse gas emissions, has led many economists to focus overwhelmingly or exclusively on pricing carbon emissions in formulating policy. Such pricing is indeed a critical part of policy, but it must be complemented by action on other key important failures.
These include research and development (R&D) and innovation, which stem from creators’ inability to capture the full value of their ideas due to knowledge spillovers. Without policy, that leads to under-investment in innovation. Research shows that combining carbon pricing and R&D can be much more powerful than carbon pricing in isolation (Acemoglu et al, 2012).
Another critical market failure concerns networks. Without policy, markets do not adequately account for network interdependencies and can ignore systemic risks and opportunities. Understanding and acting to improve ‘feedbacks among interacting elements’ (Catanzaro and Buchanan, 2013) can bolster efficiency and unlock economic value. For example, the quality of urban mobility is linked to urban planning decisions, the value of having an electric car to the availability of chargers, the viability of clean energy generation projects to grid availability, and so on.
Further important market failures concern information – for example, on how products have been made and other co-benefits where health from avoided pollution can be of great importance (see Figure 2). Capital market imperfections can hinder finance for the strong new investments that are required – development banks can play a key role here.
Figure 2: Key market failures related to climate and sustainable development
Institutional strength, governance and the investment environment
Policy predictability, coherence and a clear direction of change are all fundamental in building the confidence needed to foster investment in the green transition. Policies will change as circumstances change and learning takes place.
But for investor confidence, such change should be ‘predictably flexible’. Criteria for flexibility should be transparent – for example, reducing subsidies for renewables as and when costs fall and diffusion occurs. Concerted action across government, to foster policy alignment, and convening stakeholders, to generate cohesive action, can advance investment more quickly than measures that are uncoordinated across ministries.
‘Country platforms’ can provide mechanisms for coordinating the mobilisation of domestic and international sustainable finance in alignment with national development priorities. Standards and regulation can guide investments and signal which forms are consistent with the long-term trajectory of the economy, in alignment with sustainability goals. As far as possible, sharing standards and coordinating strategies across countries can enlarge markets and accelerate progress (Bhattacharya et al, 2025).
An example of consistency in policy-making is in Uruguay. The country has attracted clean investment and transformed its electricity matrix in less than two decades through sustained and clear policy and regulation. It has also built credibility in innovative ways: by holding itself accountable for climate action, having established a sovereign bond with a structure where, if its aims are not met, it will pay a higher interest rate (Godfrid et al, 2025).
Further, creating a positive investment environment requires strong macroeconomic policies, which are fundamental to ensuring the high investment levels needed in sustainable sectors are translated into increased output and not just a crowding out of private investment. Debt management is part of that story. Legal institutions are also of great importance in offering clarity on obligations and for dispute resolution.
Industrial policy for a dynamic and green private sector
Fostering private investment in the new growth story requires tackling market failures, building credibility in strategy and policy, and creating a strong investment environment across the whole economy. It also involves identifying where a country’s clean economic potential and comparative advantage lie. Such was the case with the Danish government’s support for private firms and entrepreneurs in the wind power sector, which was key to creating the country’s renowned innovation ecosystem (Technology Executive Committee, TEC, 2023).
Providing the right support requires that each country crafts tailored measures, as Japan did through its Ministry of International Trade and Industry, which selected and ‘nurtured’ industries through customised measures such as tax breaks and low-interest loans, accelerating their development (Johnson, 1982). Industrial clusters can drive sectoral growth by enabling economies of scale and collaboration, as seen in China (World Economic Forum, WEF, 2026).
Fortunately, the misguided sneering at ‘industrial policy’ typical of the years of market fundamentalism of the 1980s and 1990s has subsided. Building new industries and transforming technologies in a purposive way requires strategy and policies.
While the majority of investment for the transition will be private, there will also be a critical role for public investment, a crucial element of the role of the state. For example, public transport will play a fundamental role. In many countries, the electricity grid will be owned by the public sector. In many cases, this infrastructure facilitates private activity and builds for long-term growth and prosperity.
Finance will play a key role in fostering a green private sector. Priorities include reducing investment barriers, such as high costs of capital. This frequently involves better management and sharing of risk. Given that domestic capital markets in many emerging markets and developing countries are shallow, facilitating access to financial instruments, such as foreign exchange hedging, as Brazil’s finance ministry has done through its Eco Invest programme, can have catalytic effects.
Adequate access to finance is also of importance for households, whose transition requires their own investment. Often poorer households face a higher cost of capital. How households and organisations are supported and costs distributed is a key part of policy for the transition. The national and multilateral development banks can play a central role both in helping to create the conditions for investment and in managing risk and reducing the cost of capital.
Building stability in trade and collaborating across frontiers in innovation and clean energy generation can accelerate the drivers of the growth story, with positive spillovers across countries. State leaders should work through coalitions of the willing to foster market expansion, resource sharing, cohesive policy-making, access to finance and more, contributing both to resilient supply chains and fostering innovation.
Building trust and coordination across countries can generate predictability, while conflict and volatility can be dangerous. Multilateral action is also of importance in tackling the debt, fiscal and financial constraints confronted by emerging markets and developing nations (Stern, 2021).
Public discussion, social buy-in and workforce adaptation
When the transition plans are put into action, there will be deliberate structural change at speed and scale. Some vested interests will push back, in particular fossil-fuel sectors where high rents are at stake. Without pro-active state action, ordinary citizens will face challenges that will understandably create opposition, from dislocation to increases in the cost of living. Careful policy design must manage these risks while pursuing the economic and social gains from change, which will vary across countries with different systems and structures.
Public action will be necessary to help to overcome dislocation, particularly by investing in people and places to create new opportunities, or by providing low-cost capital to help households to manage change. Some vested interests will have to be confronted head-on. Public discussion and building a shared understanding or narrative are crucial to political and social ‘buy-in’. That discussion will often be focused on localised interactions.
It is critical that policy sustains social buy-in and, for this, that the benefits of the transition are shown early. Successful interventions require designing policy packages that account for and reconcile varied interests, articulating and managing negative impacts well in advance.
Still, not all challenges can be foreseen; there will be difficulties and learning that arise along the way. As emphasised, being flexible while maintaining predictability is a critical element of policy-making, both for investment and acceptance. Thus, political systems must remain open and receptive to public input and should be active in initiating civic dialogue.
What Jürgen Habermas called the public sphere – the space in which public opinion is formed – can take many forms, including citizens’ assemblies. Well-managed transitions, rather than generating backlash, should benefit communities and their workers, potentially increasing support for incumbent governments. For example, one study suggests that Spain’s coal phase-out process had some electoral success, with government, industrial and social discussion playing an important role (Bolet et al, 2024).
Research and action
The five areas of action described (see Figure 3) are also five areas for research. In its pace and scale, the necessary transformation is unprecedented in economic history, except in wartime.
The urgency means that this is ‘public policy as if time matters’ (Stern, 2018). It concerns structural and systemic change across the whole economy of a nation. And it will lead to a new economic geography where activity moves towards low-cost clean energy. It will require financing for investment to move much more strongly into emerging markets and developing economies, where the majority of future economic growth will occur.
These are great challenges for both action and research, and they require a new economics of structural transformation. But research and action must move together. Delay is dangerous.
Figure 3: The role of the state – an action agenda
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