Decarbonisation in a Populist Age

This blog is the third in the SIP blog series, a set of blogs shared among the partners of the Sustainable Innovation Pathways project. This cross-border, collaborative effort brings together foresight, financial forecasting and technology readiness levels to understand where companies, industries, and countries can best decarbonise.

In the first two blogs, we argued that net zero has been absorbed into realpolitik and defence strategy. Climate action survives because it now serves hard interests: competitiveness, energy security, and resilience.

This third piece turns to the political weather that makes all of this harder: the rise of populism, nationalism, and protectionism.

In our Sustainable Innovation Pathways work, we examine this in the developed scenario we call Deep Oak: a world of hostile politics but persistent economic drivers.

Decarbonisation is no longer primarily a moral project; in this scenario, it is an economic inevitability, albeit one that still delivers worse climate outcomes than more co-operative futures.

Well-made scenarios force decision-makers to stress-test their plans against shocks in politics, geopolitics and technology, rather than assuming today’s consensus will endure.

Populism, nationalism, protectionism

Across Western democracies, populist and nationalist parties are moving into government or king-maker positions. Political science is clear about the core of this trend: contemporary right-wing populism couples anti-elite rhetoric with a “thick” ideology of nationalism and nativism. It is a politics that prioritises insiders, borders and national sovereignty.

That shift is now visible in climate politics. In Europe, far-right and populist-conservative parties gained ground in the 2024 European Parliament elections and have since used their weight to slow or dilute parts of the Green Deal agenda. Their narratives are familiar: climate policy is framed as an elite project, unfair to “ordinary people”, and as a threat to national industry.

Survey work across Western Europe finds that nationalist and nativist orientations are among the strongest predictors of opposition to climate mitigation policies, especially taxes, regulation and perceived lifestyle constraints.

Across the Atlantic, the United States offers a sharper illustration, exemplified by “Drill, baby, drill!”. On the first day of his second term, President Trump withdrew the US from the Paris Agreement (again), framed international climate co-operation as a bad deal for American workers, and moved to ease constraints on domestic fossil production. His administration has since frozen permitting for wind and solar projects on federal lands while accelerating approvals for fossil fuels.

This is not just a change of tone. It is a systematic move towards what is often called majoritarian or sovereigntistpolitics: the claim that the will of “the people,” narrowly defined, should override international law, technocratic expertise, and long-term commitments, including on climate.

This is Deep Oak: a polynodal, multipolar world in which international institutions are weakened, protectionism is normalised, and expert-led multilateralism is in retreat.

What populism does to climate policy, and where it stops

Populist parties oppose climate policies that are visible on bills or prices, such as fuel taxes, carbon pricing, building standards, and weaponise distributional concerns (“you will pay, others will benefit”). Recent evidence suggests that favouring economic growth over climate in 2024 significantly increased the likelihood of Eurosceptic voting compared with 2019, signalling how tightly climate policy is now bound up with wider resentments about inequality and stagnation.

At the institutional level:

• In Brussels, far-right gains have translated into slower and weaker legislation on key Green Deal areas, especially agriculture, buildings and industry.

• The US rollback of federal climate policy has materially reduced America’s contribution to global mitigation.

So far, so familiar: populism and nationalism push climate policy down the priority list, and sometimes actively into reverse.

But the rollback has limits. Analyses of European populist parties note that, once in office, they often struggle to deliver on maximalist climate promises because EU law, coalition partners and economic interests constrain them.

In other words, populism can weaken and delay climate policy, but it does not simply erase the transition.

Economic levers: why the transition keeps moving

Decarbonisation persists because of at least five economic levers:

Cost curves and competitiveness

Decades of deployment have driven steep cost declines in renewables and storage. IEA and OECD work show that new solar PV and onshore wind are now competitive with, and often cheaper than, fossil-fuel plants in most major markets, with learning rates of around 15% cost reduction per doubling of installed capacity. Global investment patterns reflect this: clean energy technologies and infrastructure now attract more capital than oil, gas and coal combined.

Green industrial policy and security politics

Industrial policy support in OECD countries grew between 2019 and 2022, with the green transition among the top three areas of support; spending on green industrial policy rose from 0.23% to 0.27% of GDP on average. Much of this is framed not as altruism but as competitiveness and security: securing supply chains, creating jobs in “left-behind” regions, and reducing exposure to imported energy and technology.

Corporate power purchase agreements and investor discipline

Large firms are entering into long-term renewable power purchase agreements because they offer price stability, regardless of prevailing political conditions. These contracts are embedded in global supply chains and investor expectations that do not swing with , are in some respects insulation against, every election cycle.

Data centres, AI and the new demand shock

AI and digitalisation are adding a new layer of pressure. The IEA projects that data centres in advanced economies will drive more than 20% of electricity demand growth between now and 2030, putting power systems back on a growth footing after years of stagnation. Other analysis suggests that their electricity consumption is likely to more than double by 2030.

This is a political problem – data centres are already controversial in Ireland and Denmark – but also a driver of decarbonisation. High-load users need vast quantities of reliable, predictable-cost power. In practice, that pushes them towards long-term renewables contracts, grid reinforcement and local clean generation, especially in countries that want the associated tax base and jobs.

Employment and local value

Clean energy is now a major employer in its own right. The IEA’s World Energy Employment 2024 estimates that clean energy jobs reached about 34.8 million in 2023, surpassing fossil fuel employment, with clean energy accounting for most new energy jobs. IRENA’s latest jobs review finds 15.7 million renewable energy jobs in 2023, up from 13.7 million in 2022, with the EU hosting around 1.8 million of them. In the UK, the “net zero economy” is estimated to contribute £83 billion in gross value added and to support nearly a million jobs, with average wages significantly above the national average.

For populist and nationalist governments, these are not environmental statistics; they are arguments about good, visible, local jobs.

Taken together, these levers mean that much of the transition is now baked into capital stock, supply chains, labour markets and investor expectations. Turning it off would be expensive and difficult, even for governments hostile to climate politics.

Populist economics in Deep Oak

Deep Oak is the developed quadrant where these dynamics play out:

• Populist, nationalist and protectionist politics in much of the West;

• A polynodal, multipolar world in which international institutions are weaker and climate co-operation is thin;

• Climate and energy policy is electoral ammunition that translates nationalist grievances into opposition to mitigation;

• Global temperature outcomes are significantly worse than in more co-operative scenarios.

  
  

But in this scenario, politics and economics can pull in different directions, such as:

• On the political side, carbon prices are lower and less credible; CBAM and climate diplomacy are contested; expert advice is downgraded in favour of short-term “vibe-based” policy.

• On the economic side, simple cost pressures, as well as sunk investments, cost curves, industrial strategy, employment and corporate contracts keep large parts of the decarbonisation agenda moving.

Our model encodes this world into parameters, such as effective carbon prices, innovation speeds, learning rates, and then explores which investment pathways remain rational under these constraints. It shows that the transition does not vanish, even when politics are hostile: because the economics are not.

Renewables for a populist age

Decarbonisation, especially the energy transition, do not need moral arguments in a populist age. So let’s make the case in other ways:

• Sovereignty: renewables and storage cuts reliance on imported coal, oil and gas, and on foreign technology suppliers.

• Security and resilience: local generation and hardened grids protect against economic coercion, cyber-attack and supply shocks.

• Jobs and place: green industrial policy and clean energy projects anchor high-value employment in regions abandoned by globalisation.

• Fair prices: cheap renewables and efficiency promise to keep bills down in an era of volatile fossil prices.

• Digital competitiveness: clean, abundant electricity is the precondition for hosting AI data centres and advanced industries, and the tax revenues that come with them.

Qualitative/Quantitative/TRL tools such as SIP translate scenarios into concrete abatement pathways, investment priorities, and risk profiles that boards and ministries can use.

None of this requires agreement about climate ethics. In Deep Oak, governments can be sceptical about “net zero ideology” while promoting renewables, grids, efficiency, and green jobs for reasons of sovereignty, industry, and electoral survival.

What foresight is for in a populist age

Our SAFIRE scenarios for the European Commission, and hence the SIP scenarios, are not designed for a single political moment. They were built to explore how the same strategic goals play out under very different political and geopolitical conditions: from co-operative, rules-based scenarios to fragmented, populist ones.

Our development of Deep Oak is one such scenario. It shows that the objective can stay constant, resilient, net-zero-aligned energy and industrial systems, even as the political route to get there changes radically.

In that sense, the persistence of decarbonisation under populism is not just a curiosity; it is an illustration of why this kind of work matters. The transition keeps going because it now hits so many pressure points of populist economics – sovereignty, jobs, security, industrial pride – even when the moral language that launched it has faded.

The task for foresight and strategy is to recognise that reality, model it honestly, and expose to decision-makers the benefits of choices they may make for entirely different reasons, and to keep those benefits in view, whatever happens next in politics.

Written by Jonathan Blanchard Smith, SAMI Director

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

Achieve more by understanding what the future may bring. We bring skills developed over thirty years of international and national projects to create actionable, transformative strategy. Futures, foresight and scenario planning to make robust decisions in uncertain times. Find out more at www.samiconsulting.co.uk

Image by Gerd Altmann from Pixabay