THE POLITICAL ECONOMY OF CLIMATE ACTION

By Stephane Hallegatte, Paolo Avner, Ira Dorband, Catrina Godinho, Dirk Heine, Penelope Mealy, and Jun Rentschler

Climate change is a defining challenge of our time—and we know how to stop it: stabilize the climate by cutting emissions to net zero by mid-century, while developing pathways to resilient, sustainable development. The world has committed to doing just that, and 139 countries and counting already have net zero targets in place. But commitments are not yet translating into policies and investments at the pace or scale required, because they are often hampered by politics, vested interests, and competing needs.

This report looks at the political economy of the net zero policy, from the common challenges to the development of strategies to overcome them. It shows how governments can improve political economy conditions over time with progressive climate governance interventions, while overcoming more immediate barriers with better policy design and communication. By addressing political economy issues, such as distributional conflicts or ideational opposition, these strategies can unlock progress to increase the feasibility, fairness, and effectiveness of net zero policy—thus turning climate goals into climate action.