The Age of Realpolitik: Why Net Zero Needs a New Logic

This blog is the first 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.

It has become fashionable to say that climate has “slipped down the agenda”. The headlines are about war in Europe and the Middle East, defence spending targets, industrial subsidies, sanctions, and supply chains. Since Russia’s invasion of Ukraine, European governments have re-written energy policy at speed, scrambled for new gas supplies, and poured money into re-armament.

At the same time, public tolerance for visible green measures has weakened. From the rise of explicitly anti–net zero rhetoric in the UK and elsewhere, to farmers’ protests and broader “greenlash” across Europe, populist movementsincreasingly frame climate policy as an elite project that raises costs for ordinary people.

Yet for all this, the energy transition has not stalled. On the contrary, the International Energy Agency (IEA) now projects that by 2030, based on today’s policies alone, global energy systems will look radically different: electric vehicles will account for a rising share of new car sales, renewables will dominate new power capacity, and demand for fossil fuels will peak this decade.

This tension is the starting point for this series of blogs on the Sustainability Innovation Pathways (SIP) project. If we are indeed in an age of realpolitik – of hardened national interests, renewed militarisation, and fracturing economic blocs – then net zero will only endure if it serves those interests. The moral case is no longer enough. For futurists, this work is a case study on understanding how futures thinking can be blended with other disciplines to provide coherent, action-focused change in the real world and, for decision-makers, on what ‘good’ futures work looks like when money and politics are on the line.

Realpolitik replaces post-Paris idealism

The post-Paris narrative of climate policy assumed a world of growing multilateralism and technocratic problem-solving. The logic was clear: align with 1.5°C–2°C pathways, design carbon prices and regulations, and let markets do the rest.

The world we inhabit now looks very different.

• Defence spending is crowding the field. NATO allies are ramping up budgets; new analysis suggests that the Alliance’s current spending boom risks diverting trillions away from clean-energy investment and adds materially to global emissions.

• War has re-politicised energy. The Ukraine war forced Europe to cut dependence on Russian gas, absorb price spikes and confront infrastructure sabotage. This created short-term setbacks – more coal, emergency LNG – but also accelerated efficiency measures and clean-energy deployment as a matter of security, not virtue.

• Industrial policy is back with a vengeance. The US Inflation Reduction Act and the EU’s Green Deal Industrial Plan marked a decisive turn towards green industrial policy – subsidies, local content rules, and cleantech manufacturing strategies aimed at jobs, competitiveness, and strategic autonomy, not merely emissions targets.

• Populist backlash is real. Across Europe and beyond, parties of the radical right – and in some cases the radical left – have discovered that attacking net zero is electorally profitable. They link climate policy to higher energy prices, cultural “overreach”, and perceived threats to traditional industries.

• Voters have reordered their priorities. European polling suggests that concerns about security and cost of living now rank above climate change, even as majorities still support climate action in principle and remain sceptical that governments will deliver.

In other words, the political operating system has changed. We are no longer in a world where decarbonisation can present itself primarily as a global moral project. It must make sense as defence policy, industrial policy, and household-security policy, simultaneously and under pressure.

The headline claim of this blog is clear: decarbonisation is surviving this harsher environment not because of policy rhetoric, but because it serves core interests of states and firms. Three reasons:

Economic strength and growth

In multiple jurisdictions, “net-zero sectors” are already growing faster than the rest of the economy. A recent UK government analysis, for example, says net-zero-aligned sectors are expanding about three times as fast as the economy as a whole, with over £50 billion of private investment announced in clean technologies.

Green industrial strategies, particularly in the EU and US, are now framed explicitly around:

• High-quality jobs in manufacturing and engineering;

• Domestic value capture in strategically important supply chains;

• Insulation from external shocks in volatile global fuel markets.

For boardrooms, the question is no longer “do we decarbonise?”, but “how do we decarbonise in a way that protects margins, positions us for new demand, and avoids stranded assets?” That is a capital-allocation problem with a climate dimension, not the other way round.

Energy security and resilience

The Ukraine war made it brutally clear that fossil dependence is a strategic vulnerability. The energy crisis showed that relying on imported hydrocarbons from geopolitically exposed suppliers is a direct threat to national autonomy.

Clean energy, by contrast, offers:

• Domestic generation (solar, wind, storage) that cannot be weaponised in quite the same way as pipeline gas.

• Predictable operating costs, once capital expenditure is sunk, shielding consumers and industry from commodity price spikes.

• System resilience, especially when combined with efficiency, demand response, and digital control systems.

The IEA’s Net Zero by 2050 roadmap was explicit that a successful transition can be designed to maximise energy security and economic growth while limiting social disruption. In realpolitik terms, this is the strongest possible argument: decarbonisation is a resilience upgrade to the national power system.

Strategic positioning in a fragmented world

Economic fragmentation and the development of a polynodal world – the emergence of competing blocs around US, EU, China and others – reinforces the logic. Advanced economies are in an open race to anchor cleantech value chains, secure critical minerals, and set standards.

For firms operating in globally traded sectors (steel, cement, chemicals, autos, advanced manufacturing), the implication is:

• Regulation will not converge neatly.

• Cross-border carbon policies (CBAMs, product standards, content rules) will proliferate.

• Competitive advantage will depend on being able to navigate multiple, partially incompatible regimes while still delivering credible decarbonisation trajectories to investors, lenders, and customers.

Net zero is no longer just a distant ethical target; it’s now about steering through a crowded, hostile sea of other priorities and constraints, and still getting there in one piece.

The old climate narrative is no longer enough

Much of the public narrative around net zero is still framed in terms of “saving the planet”, “keeping 1.5°C alive”, or “doing our fair share”. Those remain important, but they are increasingly out of sync with the decision contexts that matter.

• Governments are choosing between air defence and grid investment.

• Finance ministries are balancing green subsidies against fiscal consolidation.

• Boards are asked to commit to 2040 targets while facing quarterly earnings pressure, volatile input prices, and unpredictable policy shifts.

At the same time, populist critics have learned to weaponise the perceived costs of climate policy – higher bills, intrusive regulations, unfair distribution of burdens – against this older narrative.

If net zero continues to be sold primarily as a sacrifice for a distant global good, it will remain vulnerable. What is needed is a new logic: one that treats decarbonisation as the default route to durable prosperity, energy security, and geopolitical leverage – and then asks how to implement that logic under conditions of uncertainty, competition, and constraint.

Bridging foresight and financial realism

Our Strategic Investment Pathways methodology uses qualitative scenarios, quantitative scenarios and technological readiness levels in a way which meets both the moral and economic drivers. It understands that in an age of realpolitik, decarbonisation decisions are capital-allocation bets under deep uncertainty, not linear compliance exercises.

From scenarios to investable pathways

Traditional scenario work is rich in narrative but weakly connected to the timing and scale of actual investment. SIP explicitly integrates:

• Qualitative and quantitative scenarios,  including geopolitical, regulatory, and demand uncertainties;

• Technology readiness and development velocity, using TRL-type assessments;

• Abatement cost curves, converted into CAPEX/OPEX time series for each candidate technology or intervention.

Instead of static charts, it generates evolving time-series abatement cost curves that show how different solutions compete over time, and how that competition changes under alternative futures.

A focused universe of technologies

Rather than modelling hundreds of hypothetical measures, we have selected a disciplined set (around twenty) of material, decision-relevant technologies and interventions, drawn from wider evidence bases such as the IEA’s technology and sectoral roadmaps.

For sectors like steel, cement, or chemicals, this means concentrating on the handful of levers that genuinely alter the long-run cost and emissions profile:

• Direct reduced iron with green hydrogen versus conventional blast furnace routes;

• CCS retrofits versus process redesign;

• Electrification of heat versus alternative fuels;

• Deep efficiency and circularity options that change demand.

The point is not to model everything; it is to model the choices that actually sit on board agendas.

Dynamic optimisation rather than static “plans”

Crucially, SIP does not spit out a single “ideal pathway”. Instead, it provides a dynamic optimisation environment - a live tool that keeps recalculating the best route as conditions change, so you can keep adjusting your course rather than being locked into a single static plan. It allows for the stress-testing of alternative sequences and timings of interventions against multiple futures; for understanding how the financial profile of a pathway shifts as assumptions change; and for identifying moves that are robust across scenarios.

Realpolitik in practice

Seen this way, SIP is not a tool for idealists. It is a discipline for decision-makers who accept the world as it is:

• Wars will continue to distort energy markets and public finances.

• Populist waves will periodically challenge green policy frameworks.

• Industrial competition will intensify around cleantech, critical minerals, and strategic value chains.

In that environment, the relevant question for a government, regulator, or board is:

Given the world we are actually in, what sequence of investments and policy moves leaves us stronger – economically, energetically, and geopolitically – while driving emissions down at the pace required?

By bringing together all these diverse elements, the SIP project can:

1. Start from a realistic map of futures, including hard-edged geopolitical and populist risks.

2. Translate those into financial and technological uncertainties that matter for concrete projects.

3. Use structured, scenario-based optimisation to test competing pathways.

4. Expose where decarbonisation is the cheapest route to resilience – and where delay or half-measures create genuine strategic vulnerability.

This is climate strategy written in the language of treasury, strategy committees, and sovereign risk units, not just environment ministries.

What next?

Decarbonisation strengthens economies, underpins energy security, and hardens resilience in a fragmenting world. The task is to make those benefits visible and investable under conditions of risk, not to pretend we still live in a post-Paris multilateral idyll.

SIP exists to do that work: to provide the analytical logic that connects foresight with financial realism, and to give senior decision-makers something more useful than either wishful thinking or fatalistic drift.

In the next pieces in this series, we will:

• Analyse how decarbonisation has become defence strategy

• Look at decarbonisation in a populist age and

• Understand how we can meet these concerns, and still decarbonise in a way which works for everyone.

Net zero does not need less ambition. It needs a harder logic. SIP is our contribution to that shift.

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 jbauer-fotographie from Pixabay