After generations as one of the primary sources of electricity generation across much of Europe and North America, since about 2013 coal burning has more recently emerged as among the most contentious areas of energy and climate change policy in the much-discussed, but little-practiced, national- and global-scale energy transitions. Energy policymakers tend to prefer stable, longer-term policies and planning to regulate electricity generation (and some aspects of pricing). However, accelerating climate change impacts, the increasing urgency of climate action, incremental increases in many public sector greenhouse gas (GHG) emission reduction goals, several changes in fossil gas and electricity generation prices and markets, and a growing inclination of civil society actors to target coal burning explicitly have combined to push an increasing number of jurisdictions, firms, and multilateral organizations to phase out supports for existing or future coal generation, and/or to announce a specific deadline by which coal burning is to be eliminated and banned.

Efforts to explicitly politicize coal burning, and thereby disrupt energy policymaking and energy investment markets, to achieve phaseouts of coal burning are, in some spaces, leading to a set of increasingly stabilized policy norms associated with phasing out and permanently ending or banning coal burning. As coal phaseout dates become common – or “normed” – in some jurisdictions and organizations, contention about coal and other fossil fuel policies shifts debates, discourses, and activism in local and transnational energy and climate politics. In short, the establishment and proliferation of coal phaseout discourses and policy norms also shape growing backlash politics and contention in reaction to coal phaseout demands in domestic and transnational politics.

This chapter brings together three intersecting discussions and developments. First are the set of questions at the center of this volume around policy stability and politicization posed by Paterson, Tobin, and VanDeveer (Reference Paterson, Tobin and VanDeveer2022). Second is the relatively sudden appearance and transnational diffusion/proliferation of coal phaseout policy demands since about 2015, including announcements and (sometimes) enactments by various public and private sector organizations at multiple levels of authoritative scale from the global to local (Adekoya et al. Reference Adekoya, Kenku, Oliyide and Al-Faryan2023; Jakob and Steckel Reference Jakob and Steckel2022; Misik and Pracharova Reference Misik and Pracharova2023; Ohlendorf et al. Reference Ohlendorf, Jakob and Steckel2022; Rentier et al. Reference Rentier, Lelieveldt and Kramer2019; VanDeveer and Boersma Reference VanDeveer, Boersma, Falkner and Buzan2022; Vinichenko et al. Reference Vinichenko, Vetier, Jewell, Nacke and Cherp2023). Third is the long-standing social science literature on norms and normative change in comparative, transnational, and global politics (see, e.g., Finnemore Reference Finnemore1996; March and Olsen Reference March and Olsen1989; Mitchell and Carpenter Reference Mitchell and Carpenter2019; Nadelman Reference Nadelman1990; O’Neill et al. Reference O’Neill, Balsiger and VanDeveer2004; VanDeveer Reference VanDeveer1997). The guiding question posed here is as follows: What can we learn about the policy stability and politicization dynamics, and about comparative and transnational normative change, through an exploration of transnational coal phaseout politics between 2013 and 2024? This analysis largely sets aside earlier national coal phasedowns and phaseouts in countries such as the UK and the Netherlands, which took place in different political and social contexts and were driven by a number of different causal factors. Put bluntly, it was not coal burning and the resulting contributions to global climate change at which Margaret Thatcher’s considerable discursive and policymaking powers were aimed.

As the title suggests, as declared coal phaseout policy norms gained popularity in the 2010s, often pushed by climate activist organizations, the early adopters were often states which had already mostly phased out the coal sector for non-climate change reasons, or which had never actually used much coal in electricity production. These declarations might be seen as “cheap signals” of climate change leadership or climate virtue. But as coal phaseout enters domestic and transnational politics and begins to impact more coal-dependent societies and economies, politics becomes considerably more contentious and normatively complex and fraught.

The chapter’s six sections proceed as follows: First is a brief summary of some major aspects of coal’s history as both a major source of energy and a major source of fractious national and transnational politics that is at the heart of the chapter. In the second and third sections, I turn to discussions of coal politics at United Nations Framework Convention on Climate Change (UNFCCC) Conferences of the Parties (COPs) and then to a short explanation of the usual content of coal phaseout policy norms. Here, we see the push by climate change mitigation activists, experts, and organizational leaders to explicitly politicize the burning of coal and demand date-certain deadlines for the cessation of coal burning and the financing of coal mining and coal burning facilities. The fourth and fifth sections explore the emergence of a set of coal phaseout norms in domestic and transnational politics and the increasing contestation or repoliticization of these emerging norms, respectively. The chapter concludes by drawing out four sets of implications for coal and fossil fuel phaseout advocates and skeptics, for understanding antagonisms between stability and politicization and for comparative environmental, energy, and climate change politics.

5.1 From Black Diamonds and the Big Smoke to Planet Killer

Humans have been burning coal for thousands of years, across continents and within ancient empires associated with China, Greece, Rome, and Aztec histories – to name only a few. But it is Industrial Age expansion – with the advent and rapid proliferation of coal-fired steam engines and coal-fired power plants (first erected in London in the 1880s) – that cements coal as a major industrial energy source from the late nineteenth century, throughout the twentieth century, and into the early twenty-first century. Throughout much of this period, it was labor rights, labor movements, and worker health and safety that often dominated national politics in states with large coal reserves and significant coal mining and coal burning. Mitchell’s (Reference Mitchell2013) work argues that coal’s fueling of industrialization and huge labor unions is a centrally important driver of democratization in industrial societies. Another illustration of coal’s central importance can be found in the fact that today’s European Union has its origins in the 1951 European Coal and Steel Community, whose early priorities included more housing for coal miners (Merry Reference Merry1955).

In the latter half of the twentieth century, environmental movements and environmental policies – especially those focused on air pollution and its risks to human health, ecological/nature protection, and architectural and aesthetic damage – began to reframe coal burning as a source of dangerous and expensive pollution-induced harms. Just as it is difficult to explore varieties of capitalism, comparative labor rights, and labor movements – or the comparative histories of socialism and socialist states – without reference to coal mining and coal burning, so too is it unlikely that comparative histories of European and North American environmental movements and policymaking could ignore coal.

Since 2015, as climate change accelerates and consensus about the needs to act to mitigate climate change stabilized, we see another dramatic shift toward framing coal burning as “bad” and “unjust” from the global to local scale (Boersma and VanDeveer Reference Boersma and VanDeveer2016a, Reference Boersma and VanDeveer2016b; Jakob et al. Reference Jakob, Steckel and Jotzo2020; Selin and VanDeveer Reference Selin, VanDeveer, Kraft, Rabe and Vig2025; VanDeveer and Boersma Reference VanDeveer, Boersma, Falkner and Buzan2022). Coal is now often framed by environmental advocates as the worst or most dangerous fossil fuel, because it is the most carbon-intensive fossil fuel and also the fossil fuel that often produces the most visible, local damage to human and ecological health.

From the early 2000s, pro-coal rhetoric about “clean coal” and “wars on coal” emerged alongside a politics of “coal phaseout” demands and announced policies. Civil society actors have demanded that public and private actors phase out coal burning and ban it – and divest entirely from coal-related investments. Two prominent examples of such activism are the Climate Action Network’s several years of anti-coal burning advocacy, including as part of their “Fossil of the Day” awards at UNFCCC COPs,Footnote ¹ and the many environmental organizations and anti-coal burning campaigns supported by Bloomberg Philanthropies, including the Bloomberg Global Coal Countdown.Footnote ² Across most Organisation for Economic Co-operation and Development (OECD) states, coal is increasingly framed in political discourse as the worst offender in climate change politics.

Many public sector actors at national, provincial, and municipal scales have either declared themselves “coal-free” or publicly announced deadlines/dates by which coal will no longer be burned in their jurisdictions. Many private and multilateral financial institutions have announced they will no longer fund or invest in coal burning facilities. These shifts have several empirical and discursive origins, including the failure (through at least 2024) to reverse global growth in GHG emissions and the frustration and anger about this fact among most climate change activists and scientists, in combination with ethics and justice-related aspects of contemporary climate change discourses and the increased price competition from renewable energy (VanDeveer and Boersma Reference VanDeveer, Boersma, Falkner and Buzan2022).

5.2 Coal and the COPs

One place to identify and explore shifting discursive and policy norms related to coal burning is in public debates, state and non-state actors’ position statements, and negotiated UNFCCC documents around the annual UNFCCC COPs. While environmental and climate activists and scientific analyses long focused attention on coal’s contributions to climate change and the need to reduce GHG emissions from coal in some countries’ domestic politics since the 1990s, the transnational normative shifts related to coal burning became much more apparent in the run-up to the 2015 UNFCCC climate change accord negotiations at COP21 in Paris. While the early 2000s saw “clean coal” exhibits and other explicit attempts to frame coal as an energy source that could be made climate-friendly, coal emerged as a priority target of decarbonization activists in the 2010s. The 2015 Paris Agreement – hailed by many as a political success in global climate change politics (Dimitrov Reference Dimitrov2016) because of a host of institutional advances achieved in the negotiations – makes no mention of the need to curb, much less phase out, coal or any other fossil fuels. Subsequent analysis about the more ambitious mitigation policies required to achieve the Paris Accord’s goal of limiting global warming to 2.0°C or 1.5°C regularly demonstrated the need for a fairly rapid phaseout of coal burning, along with steep curbs in consumption of other fossil fuels (see, e.g., Friedlingstein et al. Reference Friedlingstein, O’sullivan and Jones2022; Vinichenko et al. Reference Vinichenko, Vetier, Jewell, Nacke and Cherp2023).

At COP23, in Bonn in 2017, the UK and Canadian governments launched a multistakeholder initiative called the Powering Past Coal Alliance (PPCA) that initially included twenty-seven state, subnational, and non-state actors endorsing phasing out (thermal) coal burning for electricity production globally by 2050 (Blondeel et al. Reference Blondeel, Van de Graaf and Haesebrouck2020). Individual members of the Alliance can set their own phaseout date, before 2050. In only a month, membership had grown to fifty public and private sector organizations. PPCA has continued to grow in membership and ambition through COP28 in Dubai, where the United States announced that it would join the Alliance. Importantly, many early joiners had little or no coal in their energy portfolios when they announced the expected dates by which they would be coal-free. Examples include the UK, Sweden, California, and Oregon, for example. One might characterize the messages being sent by most of these early joiners as “cheap signals” (as the chapter title suggests). But evidence suggests that more authoritative policy norms are emerging as more coal-dependent actors – especially states – announce their membership. Such examples include Indonesia, Poland, and the United States, all of which had endorsed “Powering Past Coal” by 2023. As often happens with normative change over time, more actors begin to take more concerted policy action when the logic of appropriateness and the logic of consequences essentially point in the same direction (VanDeveer and Boersma Reference VanDeveer, Boersma, Falkner and Buzan2022; Blondeel et al. Reference Blondeel, Van de Graaf and Haesebrouck2020; Green Reference Green2018a). As more coal-dependent actors sign on, the “politics” is likely to get harder even as the anti-coal burning policy norms stabilize. As the norm becomes more influential, established, and authoritative, opposition by impacted local, national, and transnational actors also seems likely to intensify among the “holdouts” or opponents of planned coal phaseouts.

At COP26, in Glasgow in 2021, numerous state and non-state actors pushed for the formal declaration to include mention of the need to phase out coal. In the end, the declaration noted the need to “phase down” coal consumption, but no deadlines or rates of decline were included. Van Asselt and Green (Reference van Asselt and Green2023: 2) argue “that the developments at and surrounding COP26 show that [anti-fossil fuel norms] are increasingly being adopted and institutionalized.” The very public disagreements among states and among civil society actors at COP28 in Dubai in 2023, around what language to use in relation to fossil fuels, illustrate that as such norms gain influence globally, they provoke more opposition across scales from global to local.

As domestic and transnational coal politics change, environmental justice and injustice discourses and activism have added a moral weight – and increasingly morally charged and contested discourses – to both domestic and transnational coal phaseout politics over the last decade. It must be clear, however, that virtually all of these developments in policymaking debates and discourses remain highly contested once the norm and its related discourses move beyond the sending of cheap signals. COP28 illustrated that demands for phaseout goals and deadlines for coal and other fossil fuels continue to shape politics at the COPs, but that opposition to such a phaseout goal among most fossil fuel-producing states continues to keep phaseout language out of official multilateral declarations at the conclusion of each COP. UN Climate Change Executive Secretary Simon Stiell noted, in his closing speech at COP28, that “[w]hilst we didn’t turn the page on the fossil fuel era in Dubai, this outcome is the beginning of the end.”Footnote ³ This was his assessment of states’ negotiators leaving out calls to “phase out” coal and other fossil fuels but including references to phase down coal and transition away from fossil fuels in a just manner.

5.3 Politicizing Coal Burning: Demanding and (Sometimes) Achieving Coal Phaseout Policies

What newly emergent policy norms can we identify across actor types, sectors, and scales? Coal has nearly always been political in some way, but who was politicizing it, and why, has varied substantially across time and space. Over 150 years, many countries’ industrialization, political development, and labor histories are inseparable from coal burning and coal mining (Freese Reference Freese2003; Malm Reference Malm2016a; Mitchell Reference Mitchell2013; Paxman Reference Paxman2022). By the last decades of the twentieth century, coal’s substantial contributions to air pollution – and the negative ecological, aesthetic, and labor and public health impacts of such pollution – often placed the emissions from coal burning in the pantheon of domestic and transnational environmental discourses, politics, and environmental policymaking. For several decades, such politics focused on the emissions from coal burning, with environmental policymaking focusing on mitigating particulate and toxic emissions, or “scrubbing” sulfur dioxide emissions, and so on. Burning coal to generate electricity (and/or heat) was, for a while, assumed to continue.Footnote ⁴

But more recent climate change and environmental justice activism politicizes coal burning itself, in conjunction with the resulting GHG, toxic, and particulate emissions and local and global inequities and injustices associated with impacts on people and communities. This politicization was/is explicitly linked to frustration, fear, and anger about the slow pace of GHG reductions and the inadequate outcomes of decades of policymaking (Anderson et al. Reference Anderson, Broderick and Stoddard2020; Karlsson and Gelik Reference Karlsson and Gilek2020; Stoddard et al. Reference Stoddard, Anderson and Capstick2021), the influence-peddling/corruption associated with coal and other fossil sectors, and the notion that “we are running out of time” (de Moor Reference de Moor, Sowers, VanDeveer and Weinthal2023) – to name only a few themes embedded in anti-coal activism.

Recent work on the comparative politics of coal and energy policy, and the transnational and international politics of coal and energy policy, demonstrates dynamic combinations of transnational discourses and policy ideas and norms in complex interaction with highly diverse political and policymaking outcomes (VanDeveer and Boersma Reference VanDeveer, Boersma, Falkner and Buzan2022; Jakob and Steckel Reference Jakob and Steckel2022). Only a few years ago, it was possible to suggest that scholarship on global climate change politics and governance had paid little attention to emerging “global moral norms” (Green Reference Green2018a). Since then, however, numerous academic treatments of coal phaseouts movements, anti-fossil fuel activism, and multilateral agreements began to regularly characterize these policy ideas as emergent anti-coal or anti-fossil fuels norms and to discuss their proliferation (Blondeel et al. Reference Blondeel, Colgan and Van de Graaf2019; Green Reference Green2018b; van Asselt and Green Reference van Asselt and Green2023). Generally speaking, this literature agrees that norms are standards of behavior expected of certain actors – standards associated with a moral justification and/or the logic of appropriateness of particularly behaviors (Finnemore and Sikkink 1998; March and Olson Reference March and Olsen1989). Such scholarship also frequently borrows the concepts of “norm entrepreneurs” or “norm champions” – concepts denoting organizational and individual leaders or agents who knowingly seek to champion normative change – from norms scholarship, as well.

The individuals and organizations who founded and helped to build (and fund) the PPCA illustrate the importance of such entrepreneurial champions. In reference to public, private, and civil society actors’ inclination to set and announce particular courses of action, or “policies” governing their own and possibly others’ behaviors over time, the term “policy norm” is often used. Such literature and my ongoing research examine the discourses and demands of anti-coal and anti-fossil fuel activists, organizations, and social movements – and the emergent and growing set of enacted policies by public and private organizations – to specify a set of emergent policy norms.

I identify four major coal phaseout norms that appear most common among activist demands in transnational and comparative anti-coal politics, and the resulting announced phaseout policy initiatives by public sector actors and private financial institutions:

1. 1. Ban/end the construction of new coal burning facilities.

2. 2. Ban/end the financing of new coal burning facilities.

3. 3. Publicly declare the goal of phasing out coal burning and stipulate a deadline by which it must occur.

4. 4. Enact some type of official policy and periodic public reporting process to allow tracking of progress toward the phaseout goal.

Importantly, these policies – or policy norms – can be pursued by public, private, or civil society organizations and various levels of scale. So, for example, national or subnational public sector jurisdictions may pursue some or all of these – as can financial services firms, energy corporations, or energy-producing nonprofits. Importantly, bans on coal mining and coal exports – as with bans of oil and gas exploration and extraction – are often debated or demanded by some civil society actors but seem to be less commonly enacted to date. Lastly, note that the fourth policy norm on the list above is less a statement of a new policy norm and more of an implementation norm that helps make the policy declarations more credible and trackable over time.

5.4 Norm Making and Proliferation: Politicizing Coal Burning and Stabilizing Bans and Phaseout Deadlines

While previous sections summarize the changing coal politics and discourses in UNFCCC COPs since 2015, coal phaseout norm stabilization and proliferation are perhaps most apparent in public policies announced at the national level, among a growing set of subnational public actors, and among multilateral and private financial institutions. While normative changes associated with coal burning are far from universal, they are happening in many places and spaces, across local to global scales.

By early 2024, Beyond Fossil Fuels lists twenty-three European states with declared coal phaseout policies,Footnote ⁵ including three that have become “coal-free” since the 2015 Paris Agreement, thirteen with coal phaseout deadlines of 2030 or earlier, and seven with announced deadlines after 2030. Their data include another ten countries that historically had little or no coal in their electricity generation mix. In Europe, coal phaseout and coal-free declarations began with states using little or no coal but have moved over time to include more states in Central, Eastern, and Southeast Europe where significant coal burning continues. The coal phaseout norm is spreading. Furthermore, while the 2022 Russian invasion of Ukraine and the accompanying energy price spikes raised concerns about Europeans’ commitments to climate change policies and renewable energy promotion, 2023 saw record levels of renewable energy and dramatic declines in European coal consumption. Ember (2024) found that coal power generation fell by more than 25 percent and European GHG emissions from the power sector fell by 19 percent. The report noted that “Europe’s coal phaseout gathers pace” as about 20 percent of Europe’s coal plants are set to close in 2024 and 2025, especially in Germany, Italy, Poland, Greece, and Spain. Coal power generation was cut by about half between 2016 and 2023. Given the increasingly ambitious GHG reductions goals expected by EU institutions and most member states, coal’s decline in much of Europe seems likely to continue. Given that the Russian invasion of Ukraine generated urgent needs to move away from Russian natural gas among several countries with ready access to coal, the continued phasedown and phaseout policies and trends remain notable.

US coal consumption has been declining rapidly since the early 2000s, with at least ten states becoming “coal-free” by 2023. To be clear, a host of causal factors are driving coal consumption declines in the United States and Europe (VanDeveer and Boersma Reference VanDeveer, Boersma, Falkner and Buzan2022), including market and pricing dynamics, as well as environmental and climate change movements, policies, and litigation. US and European coal politics illustrate complex combinations of moral responsibility, domestic political dynamics, and the importance of the changing economic prices related to coal burning and lower-carbon energy sources (VanDeveer and Boersma Reference VanDeveer, Boersma, Falkner and Buzan2022). But in many respects, it has been easier (and common) for North American and European governments to talk the talk of coal phasedowns or phaseouts – and of GHG reductions and global responsibilities, more generally – than it has been for them to walk the walk of more significant domestic policy action and implementation.

Nevertheless shifts away from coal burning and toward more renewable energy (and some additional natural gas) continue. By 2024, the PPCA included almost sixty states, with about half of those located outside of Europe. The Alliance lists dozens more subnational governments and large corporations who also joined. Outside of Europe, the steepest declines in coal burning by late 2023 were in the United States, Chile, and Israel (Jaeger Reference Jaeger2023). All three joined the PPCA as domestic declines in coal burning accelerated. At least five Latin American states where coal is currently burned to generate electricity also joined the Alliance in recent years. This suggests that coal phaseout norms are becoming increasingly common across the Western hemisphere.

But the growing influence of an emerging set of policy norms should not be mistaken for current or future universal consensus. In fact, the growing impact of coal phaseout norms seems likely to continue to engender substantially more coal-related contention. Despite seemingly constant climate policy debates, the International Energy Agency estimates that global GHG emissions hit a record high in 2023 (Twidale Reference Twidale2024) and the US Energy Information Agency estimates that China and India will account for about two-thirds of global coal consumption between 2022 and 2050 (US EIA 2024). As more states phase out coal burning, or foreclose the option of building a coal sector, the “holdouts” seem likely to receive more attention and political and economic pressure. Such holdouts might be large coal consumption states or large coal mining and coal exporting states (such as Australia). Also, after current coal burning states announce a coal phaseout deadline in international venues, as Vietnam and Bulgaria have done, political contention often shifts to domestic and international actors involved in implementing such goals (Do and Burke Reference Do and Burke2023; Spasic Reference Spasic2024). The road ahead for coal phaseout declarations and implementation seems unlikely to be linear, depoliticized, or lacking in contention (Medzhidova Reference Medzhidova2022; Muttitt et al. Reference Muttitt, Price, Pye and Welsby2023).

The Obama and Biden US presidential administrations, together with influential EU and EU member state officials, used their traditionally substantial leverage over World Bank and International Monetary Fund (IMF) policies to push these organizations and other multilateral development banks to curtail coal financing. Since 2013, the World Bank officially has a moratorium on directly financing coal burning power plants, and more recently it supports “fair energy transitions” and the PPCA, for example. Critics note, however, that loopholes in such policies still allow some of its partners and intermediaries to fund some coal projects (Willis and Indri Reference Willis and Indri2023). In the decade following the World Bank’s declared moratorium, the multilateral and private finance sector changed substantially where coal financing is concerned. A 2023 report by the Institute for Energy Economics and Financial Analysis (Trivedi and Srivastava Reference Trivedi and Srivastrava2023: 4) found that “over 200 significant financial institutions have established coal exclusion policies, with divestment momentum away from coal accelerating in the last two years.” This number includes eighty-seven banks, fifty-one insurers and reinsurers, thirty-six asset management firms, and twenty-seven export credit agencies, multilateral development banks, and development finance institutions. While just over half of the institutions are based in Europe, the others are from the Asia-Pacific region, North America, Africa, and Latin America. Almost a quarter strengthened their coal export policies in 2021 or 2022. The report is filled with evidence and language about the growing “momentum” in favor of coal exclusion policies.

However, 2024 brought evidence of some major financial firms “flip-flopping” or “retreating” from their coal exclusion and other climate change action commitments (Gelles Reference Gelles2024; Sorkin et al. Reference Sorkin2024). A combination of political backlash against such commitments in many US states and the Republican Party and concerns about investor lawsuits related to such firms’ fiduciary responsibilities seems to be driving these changes among some North American financial services corporations. Also of concern to climate activists and researchers are the various ways that financial institutions continue to help raise money for coal, oil, and gas investments even after announcing restrictive policies – as happens when they participate in corporate bond markets, for example. One report estimated that European banks, most with restrictive fossil fuel policies related to their direct investments, helped fossil fuel firms raise more than EUR 1 trillion on such bond markets from 2016 to 2023 (Ambrose Reference Ambrose2023) – that is, after the 2015 UNFCCC climate summit in Paris.

The flip-flopping recently seen among financial institutions’ coal-specific and/or broader fossil fuel policies serves as a clear reminder that normative change rarely occurs in a simple, singular, linear, or inevitable path. The more long-standing set of energy policy debates that illustrates this point can be seen around nuclear energy phaseout policies, where Germany and Sweden have played host to several flip-flops in policy and/or controversial delays in phaseout implementation (Johnson Reference Johnson2023; Maquire 2023). Subsequent governments may bring different views into power, or subsequent events (like energy price spikes or war) can certainly result in phaseout schedules or commitments – or existing bans being reversed. In Sweden, a new conservative government (after 2022) seeks to reverse the nuclear phaseout planned since the 1980s, while in Germany, national leaders have struggled and sometimes delayed various plans and implementation goals as they seek to implement planned phaseouts of both coal burning and nuclear power.

5.5 Politicizing and Contesting Phaseouts and Financing Bans

As coal phaseout norms have proliferated across states, multilateral and transnational political fora, and multilateral and multinational financial institutions, a host of actors and arguments that critique, contest, and oppose coal phaseout policy norms have emerged in discourses and political action from local to global scale. Objections to and grievances about coal phaseout policies commonly invoke justice and injustice – particularly three forms of justice common in climate change politics and research: distributional, procedural, and recognitional (Newell et al. Reference Newell, Srivastava, Naess, Contreras and Price2021; Zimm et al. Reference Zimm, Mintz-Woo and Brutschin2024).

Local- and national-scale critics of coal phaseout policies commonly embed their concerns in distributional justice concerns, focusing of the costs borne by coal sector workers, families, local communities, and coal-dependent regions and the need for substantial compensation and interventionist policies (Bang et al. Reference Bang, Rosendahl and Borhringer2022; Busch et al. Reference Busch, Ramasar and Avila2023; Jakob et al. Reference Jakob, Steckel and Jotzo2020; Steckel and Jakob Reference Steckel and Jakob2022; Wong et al. Reference Wong, Roser and Maxwell2022). Such politics can be easily identified at the local and state/provincial levels in coal mining regions of the United States, Spain, and Germany, for example, but research demonstrates such justice-related concerns and debates are quite similar across the Global North/South binary (Busch et al. Reference Busch, Ramasar and Avila2023).Footnote ⁶ Because more coal phaseouts have been achieved in parts of the Global North, this literature draws heavily on those cases. Nevertheless, coal-dependent regions of states like China, India, South Africa, and Indonesia seem likely to face similar challenges if national and global governance increasingly prioritizes decarbonization policies. In many respects, how these objections are articulated and addressed (or mostly ignored) in provincial and national politics might be expected to mirror comparative politics dynamics and research around other issues combining domestic material interests and moral arguments/imperatives.

What levels of support for displaced workers and local and regional economic damages should be borne by the larger society via state and non-state organizations? Few advocates for local- and national-scale justice want to emulate the violence and economic and social injustices meted out by the UK’s Thatcher government on miners and mining families, trade unions, communities, and regions. Drawing lessons from this era, Paterson’s (Reference Paterson2024) challenging question asks, “can you destroy the power base for fossil fuels without creating massive injustice?” The economic, ecological, social, cultural, and political legacies of many former UK and US coal mining regions pose a host of complex justice questions for such communities around the world if coal is to be rapidly phased out, and fossil gas and oil are soon to follow. It should be noted, however, that the ecological and human and community health costs of continued coal burning and other fossil fuel infrastructures are also rife with distributional justice concerns, including highly racialized fossil fuel burdens in the United States (Donaghy et al. Reference Donaghy, Healy, Jiang and Battle2023).

Global- or transnational-scale critiques of coal phaseout policies invoke a complex mix of procedural and distributional concerns. Procedural justice concerns are often related to the principle of sovereign authority and/or to contemporary decolonial discourses and critiques (Biddau et al. Reference Biddau, Rizzoli and Sarrica2024; Brown and Speigel Reference Brown and Spiegel2019; Feffer Reference Feffer2023; Hamouchene Reference Hamouchene2022; Malm Reference Malm2016b; van Ryneveld and Islar Reference van Ryneveld and Islar2023). Among the paradoxes in these debates and scholarship is that colonial power often drove substantial portions of fossil fuel system and construction across parts of the Global South, while contemporary concerns about growing “green” or renewable energy “colonialism” are increasingly expressed. The use of power and influence by European and North American states in both bilateral relations and multilateral fora increasingly appears as a chief concern, whether such influence is being exercised in UNFCCC processes (often by states who have yet to phase out coal and/or have rather poor decarbonization records at home) or in multilateral development banks and private sector financial institutions. In other words, the growing pressure – or “incentives” – for states in the Global South to phase out coal increasingly engenders all of the same concerns associated with the exercise of power in many areas of global governance and international organizations. Such concerns often note the substantial fraction of historical GHG emissions sourced in the Global North and the generally quite slow pace of such countries’ domestic decarbonization at home.

An additional critique focuses on the aggregate amount of financial assistance available, whether one looks to current and historical pledges made within UNFCCC processes or the total amount of financial assistance available in various multilateral and private financial institutions for the alleviation of energy poverty and the expansion of reliable and adequate electricity in the Global South. Are states and societies in India and South Africa expected to bear most or all of the costs of slowing, reducing, and eventually ending coal mining and coal burning?

5.6 Whither Coal and Politicized Fossil Fuel Infrastructures?

To conclude, I focus discussion on four sets of implications of contemporary coal phaseout politics: for advocates of more substantial climate change mitigation policies; for skeptics of many aspects of globalized prohibitions in climate change politics; for the stability and politicization debates at the center of this volume; and for the potential benefits of more systematic comparative politics within globally and transnationally framed research.

For climate change mitigation policy advocates, the “success” (from their perspective) of coal phaseout policy and goal proliferation – and of increasing implementation of many of those policies – serves as a model for discursive and material strategies aimed at other fossil fuel decarbonization goals. These goals include phaseouts for internal combustion engines, for diesel trains/rail, for the expansion of natural gas infrastructures, for the reduction and phasing out of natural gas burning for electricity production, and for more general anti-fossil goals/norms. In the medium term, coal phaseout activists seek to increasingly isolate and target the small number of states which now constitute the vast majority of global coal burning. More recent climate change-related prohibition movements focusing on a coal elimination treaty (Burke and Fishel Reference Burke and Fishel2020), leaving fossil fuels in the ground and advancing anti-fossil fuel norms (Newell and Simms Reference Newell and Simms2020), and efforts seeking geoengineering non-use agreements (Biermann et al. Reference Biermann, Oomen and Gupta2022; Gupta et al. Reference Gupta, Biermann and van Driel2024; VanDeveer et al. Reference VanDeveer, Biermann, Kim, Bardi and Gupta2024) all seek to explicitly politicize areas of global climate policy and governance as a means to establish and promulgate climate change-related global prohibition regimes.

For coal phaseout skeptics and opponents, the political dynamics explored here suggest the continued use of combinations of material and discursive power to shape anti-fossil fuel politics generally. For such actors, (re)politicizing anti-fossil fuels norms and their implementation via existing organizations and material constraints seems likely to focus on distributional, procedural, and distributive justice concerns. These actors will remain reluctant to prioritize climate change above issues of local and global poverty alleviation, representational and procedural priorities within global governance, and a host of concrete outcomes related to the need to mitigate and eliminate energy poverty, food insecurity, and other areas of human insecurity. In this way, climate change and energy policies will continue to be critiqued as an “arena” of global-, national-, and local-scale policymaking that must focus on economic, social, and global justice and the institution of transnational power and influence – not solely or primarily on climate change per se.

Coal phaseout politics teach us about the antagonisms between stability and (re)politicization. First, while coal has long been framed in highly politicized ways in national and international politics and policymaking, it takes concerted and sustained effort by diverse sets of agents to politicize burning it and to reframe politics around phasing out its use entirely – and banning the financing and burning of coal for electricity generation. Such agents have, in many domestic, transnational, and interstate fora, critiqued and politicized burning it at all, as well as related issues like financing coal infrastructures of all kinds and mining, transporting, and exporting it. Interestingly, it seems likely that some depoliticized developments and discourses, such as those associated with the price of renewable energy and the co-benefits of coal phaseouts, afforded opportunities to politicize coal burning.

In seeking to phase out and permanently ban coal burning, many advocates seek to move from one stable set of norms and policies to another. But this is not a case of simply moving from one stable set of policies and associated expectations to another stable state, via a short period of politicizing policy, governance, and outcomes. Instead, phaseout policies have been the subject of substantial local-scale critique in coal mining communities and coal mining national polities, as well as the subject of explicitly normative and ideological critique of “imposing” coal phaseouts across North/South or colonial/decolonial lines. Stabilizing new policy norms associated with phasing out and permanently banning coal burning attracts the attention of agents who object to the new norms by invoking both distributive and procedural justice arguments. In fact, the cross-scale politics of justice may invite more complex, iterated politicization, given the essentially contested nature of various forms of justice. The implication here being that many agents can make and deploy different and conflicting claims of justice and injustice.

Lastly, for comparative and international environmental, climate, and energy politics scholarship, it also suggests the need for a more systematic comparative politics of coal mining, investment, exports, imports, and coal phaseouts. What domestic and transnational factors make coal phaseout policies more/less likely to be enacted? And what causal factors result in effective implementation, or political backlash or rollback of such policies? Such research can draw on the growing comparative environmental politics scholarship (Sowers et al. Reference Sowers, VanDeveer and Weinthal2023; Steinberg and VanDeveer Reference Steinberg and VanDeveer2012) – as can work on the comparative politics of climate change and green energy backlash and policy rollbacks. So far, there appear to be few examples of state rollbacks of coal phaseout policies. As noted in this chapter, however, that is not true of private sector financial institutions. As similar “phasedown” and/or “phaseout” political demands and policy dynamics develop around natural gas – whether or not to continue to invest in expanded gas infrastructures of all kinds or whether to pledge phasedowns and/or phaseouts by particular dates – what is needed is a more robust comparative politics research agenda examining anti-fossil fuel activism and decarbonization policymaking more broadly across states and other jurisdictions, and across civil society and private sector organizations. The politics and governance of energy transitions and decarbonization pathways seem quite unlikely to produce stable, linear, and uncontested policies over time and across scales, jurisdictions, and sectors.

This chapter explores a particular sort of tension between the pursuit of policy stability and the recurrent politicization of climate change. As climate policy regimes, focused on engineering a smooth pathway to shift emissions toward (net) zero over time, develop, they bring new objects of governance into view. These objects have their own preexisting political fields and dynamics. When policy regimes on climate change were established, the initial focus was for the most part on the energy sector. This has been for good and obvious reasons – fossil energy remains comfortably the single most important source of climate change, accounting for 65–75 percent of overall greenhouse gas emissions in 2010 (fossil carbon dioxide is 65 percent plus, while methane is 16 percent, a substantial amount of which comes from fossil fuels; see IPCC 2014: 7). As a result, policy was focused on shifting supply in the electricity sector, pursuing energy efficiency, and once electricity decarbonization was underway, electrifying direct fossil fuel use. At the same time, the political problems of this approach are well-known: We have many analyses of the way that incumbent interests in fossil fuels (oil, coal, gas) and their key allied sectors (aviation, automobiles, fossil fuel-dependent manufacturing like cement, steel, and plastics) have been able to turn the pursuit of stable emissions reductions into stability as the status quo (e.g. Brulle Reference Vinter2014; Newell and Paterson Reference Newell and Paterson1998; Stokes Reference Stokes2020).

But within the logic of a stable policy regime is a logic of what I call scope expansion in climate policy. The more or less exclusive focus on the energy sector made sense in a world where emissions only needed to be reduced by 60 percent, as the first Intergovernmental Panel on Climate Change (IPCC) report stated in 1990. But as the emissions reductions needed to respond adequately to the climate crisis have increased, so has the scope of climate policy: Remaining sources of emissions have become the object of attention for both researchers and governments, and carbon sinks also come into view in a deeper way. This process generates new sorts of potential for political conflict as new actors and power relations are brought into play in relation to climate change policy. Some of this focus regards the so-called hard-to-abate sectors such as steel and cement (Bulkeley et al. Reference Bulkeley, Stripple and Nilsson2022). But land use, agriculture, and food systems have also become increasingly the object of attention. In the Global South, land use emissions have long been much more important, and deforestation has been highly important to both the emissions profile of many countries (most famously Brazil; see Hochstetler, Chapter 9, this volume) and the contentious politics of climate change. The shift in attention is thus to land use questions in the Global North, triggered by the need for such countries to aim at “net zero” emissions by around 2050 at the latest, to meet the goals of the 2015 Paris Agreement.

This chapter turns its attention to one aspect of scope expansion in climate policy action into land use in the Global North: the focus on peatlands in the UK. Peatlands are global in scope, and there are wider initiatives such as the Global Peatlands Initiative, which hosted a large pavilion at the 26th United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP26) in Glasgow along with various other partners (Global Peatlands Initiative 2021). Peat has also become an object of climate governance in other countries (on Norway, see Farstad et al. Reference Farstad, Hermansen, Grasbekk, Brudevoll and van Oort2022; on Finland, see Ratamäki et al. Reference Ratamäki, Jokinen, Albrecht and Belinskij2019; on Ireland, see Carter and Little Reference Carter and Little2021). As such, we see an emerging comparative politics of peat. But peatlands are a particularly prominent part of the land use and climate change picture in the UK, and a focus on the UK demonstrates particularly well these dynamics of scope expansion bringing new actors and conflicts into view. The UK is also a useful case in this regard precisely because it is at the forefront of such scope expansion – having eliminated coal from electricity production and being well advanced in decarbonizing electricity, it is now in the position of having to move to other sites to pursue climate ambition beyond electricity. It is thus instructive for the challenges that many other countries may face in the near future.

The dynamics of stability and politicization still play out in this case, but they do so rather differently. Peatlands, especially in mountain areas, are far from central to contemporary economies overall, compared to fossil energy. The power of those who control such spaces therefore does not derive from the structural qualities that fossil energy has. But they are important for a range of other reasons. A focus on this politics of peat emphasizes one element in the book’s overall narrative: that the pursuit of stability in terms of either long-term emissions pathways or policy design over time often ends up reproducing stability as the status quo (see Paterson, Tobin, and VanDeveer, Chapter 1, this volume).

6.1 Peat as an Object of Climate Governance

Peat emerged as an important element in climate politics and governance because of its particularly important role in land-based carbon sequestration. Peatlands are the biggest single terrestrial store of carbon globally (Joosten et al. Reference Joosten, Sirin, Couwenberg, Jukka, Smith, Bonn, Allott, Evans, Joosten and Stoneman2016) and thus crucial to the climate challenge (Gewin Reference Gewin2020). Yet they are simultaneously threatened through forestry, agriculture, and economic development initiatives (Ewert and Abel Reference Ewert, Abel and Beckmann2021). The UK is host to some of the most important peatlands, and they play a particularly important role in the potential for land-based carbon sequestration in the UK, alongside afforestation. Peatlands account for around 8 percent of the UK land area (IUCN 2018). This is even more so the case in Scotland, where a disproportionate amount of the peatlands in the UK are located and whose landcover is approximately 20 percent peatland (Scottish Government 2015). These can be usefully divided into upland and lowland peatlands.Footnote ¹ The upland areas would be termed in general peat moors, and when they are well-functioning ecosystems they would be called blanket bogs, emphasizing the wet character of such ecosystems. I focus mostly on peat moors in this chapter, partly for reasons of space but partly because the complex dynamics of politicization around peat moors demonstrates well the limits of technocratic policymaking.Footnote ²

The UK’s climate policy architecture is often taken as the paradigm of a system focused on long-term policy stability: The 2008 Climate Change Act sets a long-term goal (originally 80 percent cuts by 2050, updated to “net zero” in 2019) and requires the UK government to set five-year budgets significantly in advance that must be consistent with the pursuit of that long-term goal. The act also created a Climate Change Committee (CCC), an arms-length expert agency with the responsibility for both evaluating and assessing the government’s progress toward the long-term goal and providing critical policy input to generate new initiatives to keep the pursuit of that goal on track. As such, it is often lauded as one of the most ambitious and elaborate climate policy architectures globally (Dubash et al. Reference Dubash, Pillai and Flachsland2021; Fankhauser et al. Reference Fankhauser, Averchenkova and Finnegan2018; Lockwood Reference Lockwood2021), and certainly was the result of considerable political contestation (Carter Reference Carter2014; Carter and Jacobs Reference Carter and Jacobs2014). But it is also the paradigm of a depoliticized institutional arrangement, seeking to insulate the pursuit of the overall goal from political contestation, and channel the latter where it exists into either the politics of the design of specific policies or the politics of performance over whether governments have adequate measures in place to achieve the goal (Kuzemko Reference Kuzemko2016; Lockwood Reference Lockwood2013). This depoliticization of climate strategy has been largely successful, and the architecture has largely survived major political shocks such as Brexit (Farstad et al. Reference Farstad, Carter and Burns2018). It has also, at least until very recently, so far survived contestations from within the Conservative Party while it has been the governing party (Carter and Pearson Reference Carter and Pearson2024). This opposition to climate policy has become more vociferous from 2021 onward with the establishment of the Net Zero Scrutiny Group (Paterson, Wilshire, and Tobin Reference Paterson, Wilshire and Tobin2023). At the time of writing (September 2023) the government under Rishi Sunak has been taking more significant steps to roll back key parts of UK climate policy (e.g. Jackson Reference Jackson2023), raising important questions about the durability of the UK climate policy architecture exhibits in the face of such a shift.

As the UK’s climate policy architecture developed, and in particular the overall target shifted first toward 80 percent cuts (in the 2008 Climate Change Act target) and then net zero from 2019, the focus on peatlands became progressively more important to its delivery. This is because of the increased centrality of carbon sequestration: Peatlands have the highest carbon density of any land ecosystem (IUCN 2018: 8) and thus their potential for carbon sequestration is particularly strong. At the same time, around 80 percent of the UK’s peatlands are highly degraded and net sources of carbon, rather than sinks of it, as well as considerably lacking in biodiversity (IUCN 2018).

The centrality of peatlands to land-based sequestration was highlighted in the UK government’s CCC report Land Use: Policies for a Net Zero UK (CCC 2020). Peatlands also have become important because of the way (like afforestation at least in some areas) that they enable the intertwining of mitigation and adaptation – restored peatlands will have significant beneficial effects on flood management, dramatically reducing the rate of water runoff in heavy rains (Goudarzi et al. Reference Goudarzi, Milledge and Holden2021; Shuttleworth et al. Reference Shuttleworth, Evans and Pilkington2019; Vinter Reference Brulle2021). This quality is particularly important in the UK, where enhanced flooding is a key climate impact already being experienced as rainfall patterns change. The Land Use: Policies for a Net Zero UK report also suggests that strategies to restore peatlands are a highly significant aspect of pursuing net zero, with the potential to cut emissions from land use broadly on a similar scale to forestry, and on a per hectare basis, considerably more so. Emissions from peatlands themselves currently account for about 1 percent of UK emissions (with the percentage of Scotland’s being correspondingly a good deal higher), so they are small, but there is potential not only to eliminate these emissions through proper peatland management but to reverse this and make peatlands store large amounts of carbon rather than release it.

Both the UK and Scottish governments have established targets and initiatives to enable peatlands to play this role in pursuing net zero. The UK-wide strategy, established in 2013, is managed by the international scientific environmental nongovernmental organization (ENGO) the International Union for Conservation of Nature (IUCN) (IUCN 2018). It aims to have 2 million hectares of peatland in “good condition, under restoration or being sustainably managed” by 2040 (IUCN 2018: 12). The Scottish government’s climate change plan 2018–2032 aims to restore 250,000 hectares (about 3 percent of Scotland’s land area) of degraded peatland by 2030 (Scottish Government 2015, 2020).

These government strategies to pursue peatland restoration operate via government–NGO–landowner partnerships and through grant funding programs by government, in particular the Nature for Climate Peatland Grant Scheme (Natural England 2021). Public funding has generated widespread initiatives and partnerships for peat restoration, including, for example, Moors for the Future, the Northumberland, Yorkshire, Lancashire peatland partnerships, and the “Great North Bog.” These are usually partnerships between IUCN, local wildlife trusts, and individual landowners (including large NGO landowners like the National Trust but also private landowners). They engage in highly technical projects to restore peatlands. At their core, such projects mostly entail rewetting the bogs by preventing water runoff (in mountain bogs in particular) to keep them wet, and then reintroducing plant species (sphagnum moss is the central species) to sustain these rewetted bogs and prevent them drying out (Shuttleworth et al. Reference Shuttleworth, Evans and Pilkington2019). Once the moors are rewetted (to become bogs), they then become sinks for carbon rather than sources (as the peat dries out it becomes highly friable and blows away readily), as well as functioning as highly diverse and distinctive ecosystems (home, for example, to the UK’s only carnivorous plant, the sundew).

Alongside these government-funded initiatives, there is a parallel development of privately funded peatland initiatives, alongside those for afforestation, which operate on a logic of carbon offsetting by large corporations seeking to offset emissions to present themselves as “net zero,” or private individuals seeking to develop projects to sell carbon offset credits on to such corporate actors, as part of their income stream. These private initiatives are often the target of significant criticism for their “land grab” qualities, on which see more in Section 6.2.2 (Garavelli Reference Garavelli2022; Macfarlane Reference Macfarlane2021).

Given that it is embedded in the broader architecture of the UK climate governance system, this approach to peat reflects the desire for long-term stable policy environments to pursue decarbonization: The quantities of carbon to be stored by peatland restoration initiatives all figure in the carbon budget calculations over time to meet the UK’s long-term targets. The various partnerships and initiatives represent well a depoliticized strategy of focusing on the technical qualities of the peat restoration initiatives and the broad social partnerships between the different actors through which they are organized. These partnerships and initiatives exemplify Harriet Bulkeley’s (Reference Bulkeley2016) notion of climate governance being something that is about “accomplishing” – it is patient, slow, experimental. But it also then entails an assumption – usually implicit – that there are no underlying conflicts; it is just about patiently working on both the peatlands and the partnerships to pursue climate governance.

6.2 The Contested Politics of Peat

But peat politics focused on rewetting initiatives sits uneasily alongside the other political qualities of peat that have been brought into view by UK climate policy “scope expansion,” and which shape the possibilities for peat to play a full role in the overall response to climate change. Three in particular are important to draw out in this context: how peatlands have been important sites of social movement campaigning and struggle; the embeddedness of peat ownership and management in the UK class structure; and peat moors as sites of aestheticized leisure consumption.

6.2.3 Leisure, Consumption, and the Cultural Politics of Peat

The final aspect of peat’s politics that is brought into view by peat restoration initiatives is that peat moors in particular are a long-standing site of highly aestheticized leisure consumption (see Figure 6.1). These leisure activities include walking, climbing, fell running, and mountain biking, but also photography, painting, and nature documentaries. Accounts of these activities often refer back to a history of the cultivation of an aesthetic of upland Britain going back to the early nineteenth century Romantics, notably the poet William Wordsworth. These activities are now a very significant part of the rural economy in many parts of the UK, and significant parts of many people’s leisure activities.

Alongside this general cultural economy of peatlands, it has also more specific cultural meanings and uses. A notable one of these is archaeology where “bog bodies” (Giles Reference Giles2020) provide particularly powerful forms of archaeological evidence. Archaeologists also often now have embedded institutional authority to intervene and be consulted on development projects, as part of the regulation of heritage, and the impetus for peat or conservation is often stimulated by archaeological concerns (e.g. Brunning Reference Brunning2012). Another is the importance of peat to whisky production, where the prospect of “post-peat” whisky has been the object of both considerable cultural-economic anxiety given its centrality to Scottish identity in particular (Dick Reference Dick2020), and considerable innovation in the industry (e.g. Fellows Reference Fellows2021), including the Bunnahabhain distillery, which was already marketing a peated whisky as “decarbonized” in time for COP27 in Glasgow (Carbon Ruins Scotland 2021).

Figure 6.1 The author’s dog, Fred, on Kinder Scout.

This picture is a good example of a dried-out and largely degraded peat moor environment, with heather as the dominant plant species. Successfully rewetted, it would become a blanket bog, retaining large amounts of water and storing carbon extremely effectively.

Figure 6.1 long description.

Photo: Matthew Paterson.

Figure 6.1Long description

A dog named Fred walking on a path through a dried-out peat moor landscape dominated by heather, with rolling hills in the background.

The development of strong cultural attachments to and regular use of peat moors has been both a cause and a consequence of the political struggles over access to land for such walking. This politicization is, however, complicated by the relationship between the peat restoration initiatives and the politics of land access for walking. Since restoration involves rewetting large areas of moorland, it at least risks making them inaccessible for walking. At least in highly popular areas (Kinder Scout is again a classic case as it is so close to major urban areas like Manchester and Sheffield), there has been extensive path maintenance to prevent erosion since the 1970s, which would have to be continued and extended (and perhaps transformed from rock paths, which is the principal means now, to boardwalks across bogs), but which would of course transform the leisure experience itself of being and walking on the moors, limiting their experience as “wild” spaces. There is consequently at least an implicit tension between the motivation of many to protect the peat moors and the actual consequences of that protection. Not all of the politicization of peat can be reduced to a class narrative of “the people” versus the landowners; it also has this more complex cultural political aspect, and is in effect also a conflict between competing forms of environmentalism (Macnaghten and Urry Reference Macnaghten and Urry1998) – an environmentalism focused on the aesthetic and leisure value of “wild spaces” versus a rather more technocratic environmentalism focused on the ecological value of peatlands due to their function in responding to climate change and improving biodiversity environmentalism.Footnote ⁶

6.3 Conclusions

Peat restoration initiatives in the UK have made considerable progress. Many of the partnerships discussed in this chapter report quantities of carbon saved in terms of avoided emissions either from degraded peat and/or from carbon absorption as the peatlands are restored. But overall, the progress is so far relatively limited. Both at the UK level and specifically regarding Scotland, progress is largely inadequate. The CCC reported, for example, that Scotland was far from being on track to meet its admittedly very ambitious targets, and singled out peatland restoration as particularly weak, with only half of its annual restoration target of 20,000 hectares being achieved (Carrell Reference Carrell2022b; CCC 2022).

Explaining this weak level of achievement is to be sure in part because of inadequate funding, the inherent technical difficulties, and the like. But it is surely also because of the underlying political tensions over the ownership and use of peat moors that provide considerable constraints on the pursuit of a technocratic, depoliticized strategy embedded in the UK climate policy architecture, which is strongly oriented toward a stable set of policy instruments and infrastructure to manage a transition to net zero. This sort of tension is present in many areas of climate policy, as this volume as a whole attests, but the form it takes in relation to peat is in part because of the logic of scope expansion: the way that, as the stable policy regime in the UK has unfolded, new sources of emissions and carbon sinks have come into view, bringing novel sorts of power relation and political conflict with them. And given that the UK is ahead of most countries in terms of emissions reductions, other countries are likely to face similar problems as they expand the scope of climate policy beyond electricity supply.

The climate crisis is destabilizing the lives of most of humanity while also worsening inequities and disparities around the world. Within this context of more intense and frequent disruptions, the quest for societal stability and social justice requires transformative change in financial flows and financial structures. Yet the COVID-19 pandemic and early 2020s instability in global banking reveal how monetary policy and central bank actions further concentrate wealth and power among those who are already privileged. Monetary policies designed to promote stability in times of crisis have exacerbated economic inequities and disproportionally benefited billionaires and corporate interests while disadvantaging most people and sustaining the status quo (Sokol Reference Sokol2023). When governments around the world are willing and able to swoop in rapidly with policy changes to protect wealthy investors to ensure financial stability without considering how their policies are worsening climate instability and increasing economic precarity, there is a serious disconnect among stability in climate policies, stability in financial systems, and stability in the earth’s climate systems (Chatterji and Stephens Reference Chatterji and Stephens2023).

Climate justice is an approach to climate action that goes beyond narrow efforts to reduce greenhouse gas emissions (Robinson Reference Robinson2018; Stephens Reference Stephens2022a). Climate justice centers the fact that climate change is inextricably connected to social justice, gender justice, racial justice, and economic justice because marginalized communities that have long faced underinvestment are more vulnerable to climate disruptions of all kinds, including extreme heat, flooding, storms, and food insecurity (Roberts-Gregory Reference Roberts-Gregory, Hall and Kirk2021). A commitment to climate justice is a paradigm shift from more conventional, technocratic ways of defining climate action (Sewerin et al. Reference Sewerin, Cashore and Howlett2022), because climate justice focuses on investing in people and communities through initiatives that acknowledge and try to repair past environmental injustices while preventing continued and future climate injustices (Kashwan Reference Kashwan2021; Stephens Reference Stephens2020). A commitment to climate justice is a commitment to societal transformation, because climate justice acknowledges that the climate crisis is a symptom of flawed economic and political systems that concentrate wealth and power through exploitative and extractive processes (Sultana Reference Sultana2022). A climate justice lens recognizes the reality that despite decades of dire warnings from climate scientists, political leaders around the world have been unable to resist the influence of corporate and financial interests and have inadvertently prioritized corporate interests over the public good (Stephens Reference Stephens, Agyeman, Chung-Tiam-Fook and Engle2022b; Stoddard et al. Reference Stoddard, Anderson and Capstick2021). An underappreciated point that we make in this chapter is that to achieve societal transformation for a stable, climate-just future, transformation of financial systems is required, which requires repoliticizing finance. This involves a new and different role for monetary policy, finance, and central banks, which have been considered apolitical in the large Western economies of the United States, the UK, and the European Union (EU), in line with the mantra of “central bank independence.”

This chapter recognizes both synergies and tensions between the quest for stability of financial systems and the quest for stability in climate policies and highlights the need to (re)politicize central banks, monetary policy, and financial innovations. The chapter acknowledges antagonism in climate politics between two schools of thought. First, those advocating for a smooth transition guided by clear, predictable, and stable policies that can be leveraged by the wealthiest people and corporations. Second, those advocating for a more radical politics that disrupts and disempowers those who currently are the most privileged (Paterson et al. Reference Paterson, Tobin and VanDeveer2022), and for innovations in financial systems that could redirect society toward a more just, equitable, and stable future in the long term. The critical role of monetary policy, central banks, and managing financial risks in preparing for a more stable future is explained and explored, recognizing that this entails a repoliticization of monetary policy. Given that the people and institutions who would benefit most from financial innovations to advance climate justice do not have much power within current systems to facilitate and encourage transformative change, and recognizing that those who are profiting within the current systems are leveraging their power and influence to resist change and perpetuate the status quo, we propose a paradigm shift to reconceptualize stability and politicization in financial systems for climate justice. We explain how current mainstream depoliticized prioritization of financial stability is, in fact, worsening climate instability. We further argue that, conversely, current mainstream perspectives on climate policy stability are worsening long-term financial instability by reinforcing a depoliticized perspective on the role of financial institutions including central banks. We conclude by emphasizing that finance, central banks, and their monetary policies are an underappreciated part of climate politics and suggest that transformative climate policies require (re)politicization of finance and financial innovations.

7.1 Financialization and the (De)Politicization of Central Banks

Central banks – public institutions in charge of monetary policy (and often of banking regulation too) – are key to climate justice and are, therefore, a critical part of climate politics, yet they are under-analyzed (Sokol and Stephens Reference Sokol and Stephens2022; Stephens and Sokol Reference Stephens and Sokol2024). Only recently have some climate policy scholars begun to focus on monetary policy and how to link monetary policy with questions on how to respond to the chaos and instability of climate change and how to advance climate justice (Boneva et al. Reference Boneva, Ferrucci and Mongelli2022; Kroll Reference Kroll2022; Langley and Morris Reference Langley and Morris2020). The power of central banks to influence the financial systems has increased in the past four decades or so, in an era of financialization (Mader et al. Reference Mader, Mertens and van der Zwan2020; Walter and Wansleben Reference Walter and Wansleben2020), coinciding with the drive toward the depoliticization of monetary policy under the slogan of “central bank independence” (Fontan and Larue Reference Fontan, Larue, Borch and Wosnitzer2021). Financialization, a process of expanding the power of finance and debt in the economy (Lapavitsas Reference Lapavitsas2013; Lazzarato Reference Lazzarato2012; Stockhammer Reference Stockhammer2008), has created a complex web of financial flows between creditors and debtors at multiple scales, and this ascendance of finance has provided a cover for depoliticization of wealth accumulation while also empowering banks and corporate interests to ignore the risks and inevitable instabilities of the climate crisis.

In response to a lack of theoretical tools to analyze the financialized, debt economy (Lazzarato Reference Lazzarato2012), the concept of “financial chains” was developed to elucidate the circulation of credit and debt in the economy (Sokol Reference Sokol2017, Reference Sokol2023; Sokol and Pataccini Reference Sokol and Pataccini2020). “Financial chains,” defined both as channels of value transfer (between people and places) and as social relations of power (Sokol Reference Sokol2017), reveal the way in which financial architecture built on debt perpetuates inequality and instability. The “financial chains” framework highlights the central role of central banks in the financial system and in financialized capitalism more generally (Sokol Reference Sokol2023). Crucially, central banks set an interest rate and in doing so they manipulate the cost of debt throughout the economy. They lend money to banks and intervene in financial markets, for instance, by buying and selling government and corporate debt. In these ways, central banks are directly creating and managing “financial chains” with major implications for the rest of the economy. The importance of these interventions increases with increasing financialization of the economy. This has been highlighted by a series of crises, from the global financial crisis of 2008 to the COVID-19 pandemic of 2020 in which the monetary policy of central banks had major political implications. In fact, it would not be an exaggeration to say that without massive central bank interventions during these crises, the economic system would have probably collapsed (Sokol Reference Sokol2023). This central position of central banks in the economic system also makes them critical institutions for climate politics (Sokol and Stephens Reference Sokol and Stephens2022). The critical role of central banks in these times of crises has led to greater political scrutiny of the politics of monetary policies.

7.2 Monetary Policy, Central Banks, and the Climate Crisis

Monetary policy refers to the decisions, actions, and communications of central banks as they influence the supply of money and the availability of credit in the economy (Boneva et al. Reference Boneva, Ferrucci and Mongelli2022). The macroeconomic objectives of monetary policy tend to focus on price stability and financial stability; climate stability has not yet become an important objective of monetary policy (Dikau and Volz Reference Dikau and Volz2021). Only since the 2010s have some central banks begun to consider and integrate climate disruptions and the climate crisis into their policies and operations (Dafermos Reference Dafermos2021; NGFS 2022; Volz Reference Volz2017).

It is worth noting here that leading central banks of the Global North, including the United States, the UK, and the EU, are doing less to integrate climate disruptions and promote “green central banking” than their Global South counterparts (see, e.g., Barmes and Livingston Reference Barmes and Livingstone2021; Dikau and Ryan-Collins Reference Dikau and Ryan-Collins2017; Volz Reference Volz2017). In the Global South, monetary authorities are less constrained by the imperative of “central bank independence,” which allows them to be more aligned with other national policy priorities, including responding to climate instability (Dikau and Ryan-Collins Reference Dikau and Ryan-Collins2017). Some central banks in the Global South have thus introduced various measures to support the “green transformation” (Stephens and Sokol Reference Stephens and Sokol2024). And the Chinese central bank has implemented a differential interest rate strategy for high/low-carbon investments (Kedward et al. Reference Kedward, Gabor and Ryan-Collins2022). In comparison, Western central banks are less advanced in “greening” their monetary policies, constrained by their price stability mandates and the goal of being “independent” from politics. The US Federal Reserve, the most powerful central bank in the world, is a case in point. In January 2023, the chair of the US Federal Reserve, Jerome H. Powell, declared that it would be “inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy” (see Chatterji and Stephens Reference Chatterji and Stephens2023). This perception that responding to the climate crisis is too political for the central bank’s monetary policy is, in fact, an ironic politicization of the stability mandate. By ignoring or dismissing climate destabilization in its policies, the US Federal Reserve is taking a political stance.

With rapidly accelerating climate instability and disruptions of all kinds, Langley and Morris have argued that central banks may well become “climate governors of last resort” (Langley and Morris Reference Langley and Morris2020). Yet, despite some recent attention to the “greening” of the financial system, most central banks continue to support investment in climate-damaging fossil fuels (Dafermos Reference Dafermos2021; Sokol and Stephens Reference Sokol and Stephens2022). Financialized and seemingly “depoliticized” monetary policy also continues to concentrate wealth among corporate interests who then have more political power to resist policy action toward climate justice, so central banks are politicizing climate action while pretending to ignore the stabilizing need for climate policy. In multiple ways, central banks are in fact continuing to exacerbate climate instability and increase vulnerabilities to climate disruption (Sokol and Stephens Reference Sokol and Stephens2022).

7.3 Central Banks at a Crossroads: Between Stability and (Re)Politicization

Central banks are at a crossroads. Echoing the tension between “stability” and “politicization” highlighted by Paterson, Tobin, and VanDeveer (Chapter 1, this volume), we consider the path forward for central banks. Clearly, there is growing recognition of the need for transformative change to move on a path toward climate justice, but whether the changes in financial systems should strive for stability or intentional disruption is an open debate (Paterson et al. Reference Paterson, Tobin and VanDeveer2022). Given that there are relatively few climate policy experts focusing on monetary policy and the role of central banks in climate policy (Bailey Reference Bailey2023; Boneva et al. Reference Boneva, Ferrucci and Mongelli2022; Stephens and Sokol Reference Stephens and Sokol2024), this is an underexplored and under-analyzed issue. Yet this is an issue that requires urgent attention.

For decades, central banks in leading Western economies have been operating according to the “central bank independence” mantra. As part of this, central banks have been considered depoliticized. Released from direct government control (and the political influence that goes with it), Western central banks have been operating as beacons of policy stability. For some, this policy stability is what successful climate policy should aspire to (Mildenberger and Lockwood, Chapter 13, this volume). However, in the case of central banks and their monetary policies, this policy stability largely works against climate objectives. Indeed, in the name of stability, central banks can be relied on to support financial markets and financial players at whatever cost. Policy stability pursued by central banks (plus a narrow interpretation of their mandates) means that central banks now seem unable to respond to the worsening climate instability that the world’s economies are facing. This inability means that central banks are currently at odds with the need for a rapid and radical transformation. Repoliticizing central banks so that monetary policy is aligned with energy and climate policy would therefore seem necessary for the systemic financial changes that are needed for climate justice.

While some maintain that central banks should ignore climate issues and continue to use the same old tools in a futile attempt for short-term financial stability, others are increasingly recognizing how critical central banks are for transformative climate politics and climate policy. Among those who do recognize the central role of central banks, some may assume that simply aligning monetary policy with other climate policies or objectives can ensure a smooth and “stable” transition. However, given the scale and speed of transformation needed, this may be too little too late. Indeed, it is likely that a more radical approach may be required. One such approach could consist of an intentional, short-term “creative disruption” to the financial system led by central banks (Sokol and Stephens Reference Sokol and Stephens2022). A short-term destabilization of the financial system may be necessary to make the financial reset for long-term stability and sustainability. Such a dramatic change requires repoliticizing monetary policy and broadening (and/or reinterpreting) the current “stability” mandates of central banks. New mandates would need to acknowledge that in a world of worsening climate chaos, long-term stability requires short-term disruption to steer humanity onto a different path toward a more stable, just, healthy, and sustainable future. To do this, central banks, monetary policy, and finance more broadly need to be (re)politicized. Acknowledging that an intentional repoliticization of central banks will have multiple consequences, it is important to recognize that central banks are already very political. With monetary policy consistently advantaging the most privileged in society while disadvantaging those who are already marginalized and vulnerable, the myth of “central bank independence” as is currently projected and perceived in most Western economies (Davies Reference Davies2023) needs to be dismantled.

For a proposed “creative disruption” to have the desired effect of advancing climate justice, monetary policy would need to become part of an all-of-government approach to climate policy. This would mean that monetary policy would be (re)politicized, debated, and contested. Furthermore, implementing “creative disruption” for climate justice would require monetary policy to integrate climate action with social, economic, and environmental justice. In practical terms, this would require monetary policy to align with – and support – a range of other policies, including fiscal policy, energy policy, industrial and trade policy, social welfare policy, gender equality policy, and other social policies (Sokol and Stephens Reference Sokol and Stephens2022).

This transformation in banking also means tackling head on the so-called climate paradox view (Carney Reference Carney2021), which suggests that some choices may need to be made between addressing climate change or guaranteeing financial stability. Recent actions (from unconditional QE to raising interest rates which have benefited fossil fuel companies) demonstrate that when central banks are faced with the above dilemma, they have consistently chosen financial stability over climate stability. This preference for always prioritizing short-term financial stability accelerates climate chaos and thus contributes to the inevitability of much bigger financial instability ahead. It is time to resist and reconsider the traditional notion of financial stability and to reclaim and restructure the financial sector toward a more climate-just future. Rather than accepting the idea of a paradox or dilemma, it can be argued that long-term stability requires short-term disruption in the way monetary policy is implemented. Instead of reinforcing an artificial choice between climate stability and financial stability, there is a growing recognition that financial stability requires climate stability, and prioritizing long-term, environmental, social, and economic stability requires a paradigm shift in climate politics and climate policies.

A paradigm shift also requires a major change in how central banks are considering climate risks. Currently, there are two major categories of risk that central banks associate with climate change in their efforts to safeguard financial stability: physical risks and transition risks (Boneva et al. Reference Boneva, Ferrucci and Mongelli2022; Kroll Reference Kroll2022; Langley and Morris Reference Langley and Morris2020). Physical risks include financial losses of banks (and other financial institutions) from increasingly volatile climate-related disruptions and weather events (storms, floods, heat waves) as well as from impacts of long-term climate changes (e.g. sea level rise). Transition risks, on the other hand, include financial losses that financial institutions can suffer as a result of “a rapid low-carbon transition, including radical policy shifts, reputational impacts, technological breakthroughs or unexpected limitations, and shifts in market preferences and social norms” (Svartzman et al. Reference Svartzman, Bolton, Despres, Pereira Da Silva and Samama2021: 565). We argue that there are two major issues with the framing of these two categories of risk. First, this framing conceptualizes financial institutions as mere victims of the climate crisis, rather than recognizing that they are active participants in destabilizing climate (with the support of central banks, as discussed). Second, as long as “transition risks” include the apparent risks from policy shifts needed to decarbonize (and thus to reduce “physical risks”), there is a major contradiction at the heart of the efforts to achieve financial stability using these two types of risk as a guide. At the extreme, it is perfectly conceivable that powerful financial institutions and central banks can argue/lobby for slowing down climate action in the name of safeguarding (short-term, narrowly defined) financial stability.

Advocating an intentional disruption in financial systems goes against the prevailing current wisdom about how central banks should respond to the deepening climate crisis (which is focused on mitigating financial disruptions). It also challenges assumptions about “stability” and how stable and just futures can be achieved. However, given that transformative change is needed, it is likely that without some kind of politicized intentional disruption of how financial systems operate, climate instability and climate injustice will accelerate and worsen. Given the intersecting and cascading impacts of climate disruptions, a comprehensive agenda for large-scale transformation toward climate justice has to include a combination of policy instruments that result in coordinated investments in reducing climate vulnerabilities while simultaneously resisting fossil fuel extraction and reliance and supporting investment in a more equitable, healthy, and renewable-based future.

7.4 Conclusions

In this era of worsening climate crisis, all politics is climate politics (Aronoff et al. Reference Aronoff, Battistoni, Cohen and Riofrancos2019). We argue, therefore, that the politics of our financial systems is climate politics and the monetary policies of central banks is also climate politics. For too long, central banks in the West have been hiding behind the mantra of “central bank independence” as supposedly apolitical institutions, without democratic scrutiny, decoupled from electoral cycles. As such, central banks have been ensuring “policy stability” of neoliberal economic management whose limits are now plainly visible. But this façade of depoliticized monetary policy is no longer viable or credible. Central banks and their monetary policies need to be repoliticized, and climate stability requires innovations in how financial systems are managed and structured.

Although climate politics has not yet adequately considered and integrated the critical role of finance and monetary policy, this is changing quickly as the monetary policy quest for “stability” is increasingly elusive, and the high cost of responding to climate disruptions and preparing for climate adaptation is being linked to finance (Kasdan et al. Reference Kasdan, Kuhl and Kurukulasuriya2021; Kuhl et al. Reference Kuhl, Shinn, Arango-Quiroga, Ahmed and Rahman2024). In this rapidly destabilizing world, climate politics needs to expand and reconceptualize the linkages among climate policy stability, financial stability, and climate justice.

We suggest that the effective repoliticization of finance, central banks, and their monetary policies requires a paradigm shift in how we conceptualize stability. Short-term stability that continues to concentrate wealth and power among a few is not in anyone’s best interest in the long term. Given that the people and institutions who would benefit most from financial innovations to advance climate justice do not have much power within current systems to facilitate transformative change, repoliticization of monetary policy needs to focus on climate justice. Recognizing that those who are profiting within the current systems are leveraging their power and influence to resist change and perpetuate the status quo, political struggle and contestation are necessary.

As the climate crisis gets worse, the threats of multiple other destabilizing crises are simultaneously expanding. Pandemics, wars, inflation, species extinction, and resource scarcities are also destabilizing forces, which means we are living in a time of the “polycrisis” (Tooze Reference Tooze2022). When facing multiple interrelated crises, the simplistic, narrow priorities of the large Western central banks are completely insufficient in supporting long-term financial and societal stability. The limits of neoliberal monetary policies in dealing with the “polycrisis,” let alone advancing climate justice, are now being fully exposed.

By emphasizing the critical role of monetary policy, finance, and central banks in the climate crisis, this chapter challenges mainstream assumptions regarding financial stability and depoliticized monetary policy and emphasizes how policy alignment and an all-of-government approach are necessary for transformation. When an all-of-government approach to transformative climate policies is embraced, new rules, different assumptions, and novel ways of thinking about financial stability and financial disruptions will emerge. A new political commitment to embracing the concept of “policy-mixes” is essential to link climate policies with monetary policy for the transformative societal changes that are needed for future societal stability.

Frederick Douglass powerfully criticized those who sought a more comfortable path to the abolition of slavery. In our current context, his words seem appropriate for addressing the climate crisis. The evidence that climate change has already affected our environment surrounds us, as millions of people suffer through heat waves, droughts, and floods. The rate of warming since 1981 has almost doubled, and the ten warmest years in recorded history have all occurred since 2010, with 2023 on track to be the hottest on record (National Oceanic and Atmospheric Agency 2023). A recent Intergovernmental Panel on Climate Change (IPCC) report noted the “brief and rapidly closing window of opportunity to secure a livable and sustainable future for all” (IPCC 2022). Activists including youth groups and scientists have taken to the streets and public square to demand action. To prevent further disaster will require large-scale transformation of the basis of our economy. This is not simply a technical problem but rather one of significant societal change.

One of the central debates among those pushing for action is whether they should adopt strategies that stabilize the policy environment, and if so, what the political impact of doing so would be. It seems paradoxical to seek change through stability – “stability” often denotes the status quo, which could mean either doing nothing about climate change or continuing current inadequate efforts. As Paterson, Tobin, and VanDeveer discuss in their introductory chapter, stability can have other meanings: pathways to long-term emissions reductions, continuity in policy design, or engineering lock-in. Stable policy design can lock in practices and technologies that facilitate long-term emissions reductions pathways, linking together different goals. However, critics view this as a too-comfortable path that is inadequate for the challenge we face (Boykoff et al. Reference Auld2010; Kouchakji Reference Jessop2023; Lamb et al. Reference Kouchakji2020).

In this chapter, I look at stability as policy lock-in with respect to the private sector, since industry is critical to the energy transition. Advocates argue that we must institutionalize norms and practices within industry that make it costly for business to maintain the current status quo. One prominent approach is through private governance initiatives, that is, voluntary industry self-regulation. These are collective voluntary standards-setting approaches that institutionalize principles, norms, and practices within a sector (Grabs et al. Reference Grabs2021; Vogel Reference van der Ven2009). If industry collectively adopts common standards and practices, the argument is that this will prevent costly government regulation, create incentives for firms to comply, and help manage risks during the energy transition. Collective standards and practices can nudge firms off the old path and onto a new more sustainable one at lower cost and less pain.

Private governance initiatives narrow attention in ways that depoliticize debates by focusing on standards, reporting requirements, and appropriate technologies. The rise of global governance more generally, with its mixture of public and private authority, heralded the potential for a new kind of politics. Corporate social responsibility, private governance, and multistakeholder initiatives recast the role of business as partners in governance and not as political opponents. However, the promotion of industry-led climate initiatives is linked to political struggles within the climate movement, in which divisions over strategic choices can impact its effectiveness and coherence (Hadden Reference Gray and Purdy2015). These choices include the turn toward voluntary standards developed and adopted by the private sector. Green et al. (Reference Green, Hadden, Hale and Mahdavi2021) argue that voluntary private governance reduces political conflict between NGOs and firms, but at the cost of slow – or even no – progress on climate mitigation or adaptation.

I argue here that private governance reflects a preference for policies that will provide a stable framework of expectations about the steps needed to make the energy transition and lock in particular standards and approaches. I explore this in the case of private climate governance in the financial sector. Banks, asset managers, and insurers all wield significant influence over policies and practices adopted by their customers. They set the conditions under which customers can borrow, invest, and manage risks. Therefore, the climate policies they adopt can ripple throughout the larger economy. For this chapter, I focus on the insurance industry and the Net Zero Insurance Alliance (NZIA), which is a private sector initiative among insurers to establish common commitments regarding decarbonization of their portfolio of business.

In what follows, I first discuss the concepts of stability and policy lock-in and their relationship to private governance. I then narrow my focus to the insurance industry, which is beginning to garner more attention for its climate policies. I provide a brief overview of how the insurance industry has responded to the challenge of climate change, its participation in the United Nations Environment Programme Finance Initiative (UNEP-FI), and the creation of the NZIA as a form of private governance. In the conclusion, I turn to the relationship between stability, private governance, and politicization.

8.1 Private Governance, Policy Stability, and Policy Lock-In

The idea of “lock-in,” or path dependence, came out of the study of technological change, and the observation that initial technological choices constrain future options. Past decisions about how to design a car or a keyboard, for instance, make it costly to shift technologies as the context changes (David Reference Hadden1985; Lewin Reference Lewin2001; Liebowitz and Margolis Reference Liebowitz and Margolis2012).Footnote ¹ The same idea applies to policy adoption. For example, building highway infrastructure invites people to drive more and makes it harder to get support for policies that favor public transit. Policy lock-in figures in the literature on institutions and path dependence. The idea of policy lock-in has a narrower focus: policies are “locked in” when they are institutionalized, that is, when the initial choice of policy becomes a standard process that no longer requires a decision or choice. It is the default policy.

Unruh has written extensively on the idea of “carbon lock-in” as a form of negative path dependence (Seto et al. Reference Seto, Davis and Mitchell2016; Unruh Reference Unruh2000, Reference Unruh2002). The policy choices about energy infrastructure taken in the past determine the technologies and energy sources we use today. This path dependence makes it extremely difficult to pursue an energy transition. Unruh argues that it is unlikely developing countries can develop further without fossil fuel-based industrialization because the carbon-based system has been so thoroughly globalized.

Climate activists often seek to create a positive path dependence by promoting policies that will do the opposite of carbon lock-in – policies that institutionalize alternative energy choices through support for new infrastructure, technology, and standards. Once in place, the goal is to move us irrevocably toward a green transition. In 2014, the IPCC report included a chapter on adaptation and implementation that highlighted institutionalization (Mimura et al. Reference Mimura, Pulwarty and Duc2014). A year later, the Paris Agreement gave a greater role to sub-state and non-state actors to progressively reduce emissions, seeking to institutionalize their contributions (Hale Reference Hadden2016). In the succeeding years, institutions at all levels of government – international, national, and local – have developed climate adaptation and mitigation plans. These actions are embedding policies in institutions to create stable expectations regarding the direction of policy. As Paterson et al. (Reference Paterson, Tobin and VanDeveer2022) note, the desire for this kind of policy stability can reduce political contention, with some observers labeling these solutions as “post-political.” However, this approach sidesteps the need to do the political work to build coalitions supporting more significant change. Instead of pursuing policy stability, some argue we should be engaging in critical debates in the political arena. They ask whether we should “pump up the volume” instead of trying to avoid the messiness of mass politics (Adler and Kentikelenis Reference Adler and Kentikelenis2022).

Private climate governance can be viewed as a way to institutionalize policy choices by firms. Grabs et al. (Reference Grabs2021: 1183) define private governance systems as “the formulation of procedural and/ or substantive rules and standards by nongovernmental actors …, their monitoring and enforcement through the same actors or third parties, and the preferential treatment of actors in compliance with such rules, for example, through improved reputation, market access, pricing conditions, or access to financing.” I include in private governance both the policies adopted by individual firms as they apply to their customers, clients, and business partners and the policies that are collectively negotiated and adopted.

There are four ways in which private climate governance is a strategy that favors stability and de-politicization:

1. 1. Private governance reinforces the market system. Cashore, for instance, identifies a set of private initiatives that he calls “non-state market-driven” (NSMD) governance. These systems adopt processes such as certification and auditing to provide reputational benefits to participants. These benefits in turn provide an advantage in market competition, incentivizing participation and compliance (Auld Reference Ahmed2014; Cashore et al. Reference Boykoff, Frame and Randalls2004; Grabs Reference Frank2020; van der Ven Reference van der Ven2019). Many voluntary initiatives rely on transparency as the mechanism for enforcement – firms are required to provide information revealing their compliance with standards set by the initiative. This approach assumes that public reporting will lead to a market response, such as consumers shunning a weakly performing company. Private governance thus relies on the market to lock in standards and stabilize policy choices.

2. 2. Private governance emphasizes consensus-building partnerships. Pepermans and Maeseele (Reference Pepermans and Maeseele2016) note that climate politics multiplies antagonisms but also compels former opponents to partner. We see this in the collective nature of voluntary climate commitments among competing firms and in the proliferation of public–private partnerships and multi-stakeholder initiatives (Westerwinter Reference Vogel, Mattli and Woods2019). These are designed to combine the different competencies, resources, and authority of often antagonistic actors. These collective efforts institutionalize policies and reflect a strategy of stability. However, they are criticized for favoring superficial cooperation by adopting weak standards and emphasizing process over outcome (Gray and Purdy Reference Grabs, Auld and Cashore2018; MSI Integrity 2020).

3. 3. Private governance empowers the private sector. Industry has the resources, competence, and expertise required to achieve the energy transition. This capacity gives their participation in private climate governance a degree of legitimate authority (Haufler Reference Hale2010). Firms have deep expertise regarding the specific ways in which their business generates greenhouse gas (GHG) emissions, and they have the technical capacity and organizational capability required for reducing them. When they make proposals for emissions reductions, they are viewed through this lens of expertise and capacity. In turn, this empowers firms in climate governance, which further reinforces market-based solutions, consensus-building partnerships, and technocratic problem-solving.

4. 4. Private governance favors process standards, technical indicators, and incrementalism. Because they are based on voluntary membership, the initial standards in many private governance schemes must be low enough to attract members, although they also must be high enough to provide reputational benefits (Potoski and Prakash Reference Potoski and Prakash2010). This is reinforced by the business penchant for benchmarking, that is, establishing standards to achieve over time. The standards are often about transparency such as reporting requirements and debates over indicators to report. This process rewards inching toward a desired goal over time instead of immediate achievement. Standards established at the creation stage may be raised over time as experience leads to acceptance and initial costs are absorbed, but slow steps forward protect the economic viability of the companies involved.

8.2 Insurance and Climate Change

The financial sector has long been viewed as a potential source of leverage to change the behavior of customers. Most attention focuses on the influence of investors and lenders, but the insurance sector has been a target of activists since the 1992 Rio conference (Paterson Reference Paterson2001). It is a critical element in adaptation to climate change, helping businesses and individuals assess risk, cushion losses, and strengthen resiliency. Insurers can signal a change in risk through shifts in pricing, deductibles, and insurance coverage (Surminski et al. Reference Seto, Davis and Mitchell2019). Insurance itself favors stability because the financial cushioning it provides supports “business as usual” even in an era of disruption (Chandler and Coaffee Reference Chandler and Coaffee2016). Traditional risk models are backward-looking, based on historical data, and not oriented to future risks.

The industry is already experiencing costly payouts linked to a changing climate. The record for insured losses from natural disasters was set in 2017, reaching $170 billion due to a particularly severe hurricane season in the United States. In 2021, insured losses from natural catastrophes added up to around $130 billion globally, the fourth-highest on record (Reuters 2022).Footnote ² The first half of 2023 experienced $50 billion in losses, and Swiss Re – one of the world’s largest reinsurance companies – estimates 68 percent were due to severe storms. Not only the number but the severity of natural disasters has increased (see Figure 8.1). Devastating floods and damage from high winds and excessive rainfall, extreme heat combined with severe drought, and massive wildfires around the world all may have been supercharged by global heating.

Figure 8.1 Number of natural catastrophes by classes of severity, 1994–23.

Figure 8.1 long description.

Figure 8.1Long description

Bar chart the number of natural catastrophes by classes of severity from 1994 to 2023. The x-axis represents the number of events, while the y-axis indicates the severity classes. Bars are divided into three parts. Bottom parts of the bars: losses below USD 1 billion. Middle parts of the bars: losses of USD 1 billion and above but below USD 5 billion. Top parts of the bars: losses of USD 5 billion and above.

The insurance industry has two sources of leverage over other industries to promote climate mitigation and adaptation – through insurance underwriting contracts and through its investment portfolio (“Scope 3” emissions according to the Greenhouse Gas Protocol).Footnote ³ Insurers can set prices (premiums) and conditions for coverage in their insurance business and selectively invest income from insurance premiums in their investment portfolios. They are on both sides of the asset revaluation dynamic laid out by Colgan et al. (Reference Colgan, Green and Hale2021): They are climate-forcing asset holders on the investment side because they can impose conditions on the firms in which they invest. They are climate-vulnerable asset holders as insurers because they insure assets that are vulnerable to climate impacts. On the investment side, their choice of where to invest can influence who gets financing – fossil fuel projects versus renewables. On the insurance side, their choices about how to evaluate and price risk or what behavioral conditions to include in contracts influence customer choices about home construction or transportation. The most powerful signal they can send about how they understand risk is by withdrawing insurance coverage entirely from activities or locations at high risk.

8.3 Private Climate Governance, Insurance, and Policy Stability

Private governance in insurance is process-oriented, focused on technical standards, and relies on market incentives to encourage compliance. Meeting standards typically means measuring and reporting emissions. Ideally it requires firms to revise insurance products and policies to incentivize climate-sensitive practices by clients and set prices (premiums) to reflect forward-looking climate risk. If these policies become institutionalized as standard policy clauses, they will lock in climate mitigation and adaptation by customers. For instance, customers may be offered better prices and coverage if they strengthen roofs and waterproof basements in storm-prone locations. This approach focuses on modifications to reduce losses and technocratic models of risk. It is not intended to redistribute costs and benefits but rather emphasizes business as usual. This result is policy stability and continuity with existing practices (Paterson Reference Paterson2021).

Many insurers participate in private climate governance and public–private partnerships addressing climate issues. The overarching framework for their commitments is the United Nations Environment Programme Finance Initiative (UNEP-FI), founded in 1992. UNEP-FI established standards on sustainable finance for bankers, investors, and insurers. But insurers belong to other initiatives: the UN Global Compact, the Principles for Responsible Investment (PRI), the Equator Principles, the Poseidon Principles for Marine Insurance, and the UN Sustainable Blue Finance Initiative. The most relevant one for examining the relationship between private climate governance and policy stability is the Net Zero Insurance Alliance (NZIA), which was orchestrated by the UNEP-FI.

In 2021, criticism of climate action by the financial sector centered in part on how financial firms were all pursuing different climate policies, targets, and indicators. Leading CEOs formed a new partnership, the Glasgow Financial Alliance for Net Zero (GFANZ), to bring different initiatives under one umbrella group. Members would align their efforts with the UN Race to Zero campaign, which means their policies are science-based, cover all emissions, have interim targets, and commit to transparency. Under this umbrella, different sectors – banks, asset managers, and insurers – launched collective commitments to net zero.

Facilitated by the GFANZ, the NZIA was launched by some of the largest international insurers in July 2021. These included Allianz, a German company with more than 150,000 employees earning around 754 billion euros in premiums in 2020; AXA, a French firm that is even bigger; Lloyd’s, a private company based in the UK; the big reinsurers Munich Re and Swiss Re; and firms based in Italy, Spain, Kenya, South Korea, and Japan (Cox Reference Colgan, Green and Hale2022a). The NZIA commits members to achieve net zero emissions in their insurance and reinsurance portfolios by their customers and business partners by 2050, with interim targets every five years after 2030. In other words, the commitment is not about their own carbon emissions but those they insure. Insurers are required to report regularly on their progress. All members must also sign the UNEP Principles for Sustainable Insurance, align with the 1.5°C ceiling established by the Paris Agreement, and advocate for science-based and socially just transition policies. Participants would be delisted if they did not meet deadlines (Cox Reference Colgan, Green and Hale2022a, Reference Cox2022b).

Initially, they were stymied by a lack of consensus on how to measure the emissions of their customers (Scope 3 emissions). They could not set net zero targets for underwriting because they had no common standard for measuring the emissions of those they insure. This led NZIA to work with the Partnership for Carbon Accounting Financials to develop metrics, which were published in November 2022. Insurers will use them in developing insurance contracts and pricing policies going forward. They will have to develop new underwriting standards to include these metrics, particularly for the GHG-intensive activities of clients. They also plan to develop incentives for reducing emissions, such as special insurance for new technologies, nature-based solutions, and claims management (Cox Reference Colgan, Green and Hale2022a, Reference Cox2022b; UNEP 2021).

One goal of the NZIA was to change how insurers evaluate climate risks in their underwriting. Insurance models are backward-looking, with risk estimates based on historical experience with losses. If natural disasters in the past were few and far between, then the evaluation of risk in long-term insurance contracts assumes the probabilities remain the same. This is one element of the conservative character of the industry, binding it to historical experience. The industry now recognizes the need to develop future-oriented models that incorporate climate change.

We can identify some of the characteristics that I argue illustrate the ways in which strategies of private climate governance are oriented toward policy stability, locking in particular approaches to action. First, insurance itself is a market-based lever to induce customers to reduce GHG emissions. The NZIA was launched in part due to the recognition by executives of the market signals about climate change, such as recent insured losses. Policymakers such as US Special Envoy for Climate John Kerry lauded the GFANZ as evidence that financial firms recognized the commercial opportunities of the energy transition (Jessop Reference Jessop2021). These all indicate that the “business case” for pursuing net zero was a significant incentive for participants. In turn, the NZIA adopted practices that would preserve the market and not overturn it.

Second, the NZIA, and the GFANZ which facilitated it, is a partnership among its corporate members. It is embedded within the UNEP-FI and linked to a number of other private governance efforts, reflecting a preference for public–private consensus building (Dubash Reference David2021; Mills Reference Malone, Holland and Houston2005; Mills and Lecomte Reference Mills2006). NZIA members must commit to the UNEP Principles on Sustainable Insurance, launched in 2012. Its leaders have expressed public support for the recommendations of the Task Force on Climate-related Financial Disclosures led by Michael Bloomberg, and for emerging frameworks such as the Task Force on Nature-related Financial Disclosures, in addition to the United Nations Sustainable Development Goals (UNSDGs) and the Global Biodiversity Framework. This complex network favors consensus-building partnerships that obscure some of the fundamental conflicts within the private sector.

Third, the NZIA empowers the private sector by leaving it to the insurers to develop standards and set their own goals. Each firm develops their own approach to reducing GHG emissions to avoid anti-trust accusations. The NZIA says nothing about divesting from fossil fuel projects entirely, which would do the most to achieve net zero commitments. The idea of “net zero” itself reflects the ability of firms to redirect attention away from hard goals. Net zero allows industry to continue with GHG emissions in some activities by offsetting them with reductions elsewhere. The NZIA lets insurers themselves off the hook, as it does not include provisions about GHG emissions by the insurers themselves.

Fourth, the NZIA focused a lot of its attention on reporting standards, emphasizing the process involved in commitments to transparency. Technical debates over how to evaluate the emissions of clients were an early stumbling block. Unlike other initiatives, the NZIA has established interim targets between now and 2050, but overall, it favors gradual approaches. The timeline to achieve net zero is slow and aspirational and involves regular reporting and incremental improvements. According to one industry representative, insurance is too often viewed only as a way to absorb financial shocks, leaning more toward adaptation and resilience than mitigation and decarbonization (Cox Reference Colgan, Green and Hale2022a, Reference Cox2022b).

8.4 Disruptions and Repoliticization?

The NZIA does not require participants to stop insuring fossil fuel projects – but strikingly, many are doing so, as they recognize the rising risks and costs of these projects (Insure Our Future 2022). Their decisions have been reinforced by clear signals from governments, particularly in Europe. The founding members of the NZIA include firms that started to phase out coal from their insurance portfolio some years ago. Swiss Re and Zurich Insurance led the charge to end coal insurance and also began divesting from coal projects. Lloyd’s of London has committed to end insurance for coal-fired power plants, although not all Lloyd’s members are going along with this. AIG adopted a comprehensive new coal and tar sands exit policy, committed to ending insurance for new projects and customers, and will phase out existing customers by 2030. Munich Re recently committed to end insurance for new fossil fuel projects and established new climate targets for its clients. Around thirty-eight major insurers are exiting coal (Insure Our Future 2022). Some observers view the end of insurance for coal projects as a sign that it will be phased out entirely as a major energy source. However, this optimistic take is undermined by big players such as Berkshire Hathaway that continue to cover these projects, and by the recent spurt of coal development projects in China (Centre for Research on Energy and Clean Air 2023).

Insurers are also withdrawing insurance from areas affected by extreme natural disasters, most notably in the United States. In Florida, property insurance has become harder to find as repeated storms and flooding have caused significant losses to insurers. Small firms have gone out of business while the major players have withdrawn. The same is happening in California due to wildfire risks and is spreading to Texas and other states. Insurance rates have gradually increased in response to a recalculation of future risk. Recent reports express concern that the insurance industry itself is being destabilized by climate change, and this could have wider implications for financial stability in general (Frank Reference Fellowes-Granda2023). The insurance industry is shifting its approach to one that takes climate risk into account, instead of looking at the past for data on risk.

The combination of losses from natural disasters linked to climate change, and efforts to develop common policies and approaches to address it, has led to two kinds of backlash. Within the climate advocacy community, a more prominent radical wing has mobilized against the weakness of efforts by insurers. For instance, net zero commitments are viewed as particularly weak, and are unlikely to be achieved in time to prevent irrevocable changes (Dyke et al. Reference Dubash2021; Wilkes Reference Westerwinter2023; Wilkes et al. Reference Westerwinter2023). While groups such as Extinction Rebellion get a lot of media attention for their tactics, groups targeting insurers have become more active. The NGO Insure Our Future campaigns to get insurers to end completely all insurance for coal, oil, and gas. It scores companies on their efforts – or lack of them – and engages in public protests outside insurance company headquarters. This is a shift from previous strategies.

But the more significant political contention comes from outside the climate advocacy community and from insurers themselves. A recent article in an industry journal asked in its title, “Are insurers being bullied?” (Moorcraft Reference Moorcraft2022). While insurers may view climate advocates as too pushy, it is the climate deniers who pose the greatest threat. Insurers have become targets of the “anti-ESG,” anti-“woke” culture wars pursued by the radical right in some US states (“ESG” is shorthand for environmental, social, and governance indicators that are often used as a means of labeling “ethical” investment portfolios). Some states in the United States now ban government agencies from working with financial firms that incorporate ESG standards into their decision-making or who offer ESG products. Texas recently banned insurance companies from using ESG criteria in setting premiums, thus excluding climate risk from consideration (Ahmed Reference Ahmed2023; Malone et al. Reference Liebowitz and Margolis2023). Others such as North and South Dakota are considering similar legislation targeting insurers, while around twenty states have passed broad anti-ESG bans. In contrast, California is considering legislation that would require incorporating ESG considerations into business decisions (Wolman and kahn Reference Wolman and Kahn2023).

These local political and legal threats have had global impact. State attorneys-general in twenty-three US states warned members of the NZIA that their collaboration could violate US anti-trust laws, threatening to pursue litigation. In response, member firms left the NZIA, including some of its founding companies. In July 2023, the NZIA chose to end the requirement for members to set GHG reduction targets in an effort to avoid the political contention, but the group was down to only fourteen members at that point (Fellowes-Granda Reference Dyke, Watson and Knorr2023). The GFANZ, the global umbrella for eight net zero industry groups, also has been undermined by these anti-trust threats and corporate withdrawals.

The insurance industry, and the financial sector as a whole, have been buffeted from both sides during the 2020s. Their lagging and weak response to demands for action on climate change, despite increased losses due to natural disasters, along with the potential collapse of their most visible effort – the NZIA – could lead climate advocates to repoliticize the issues. At the same time, even those weak efforts have been too much for the deeply politicized divisions fomented by climate deniers. The political response to the stability embedded within private governance systems may take the shape of a U-curve. The NZIA demonstrates this dynamic, at least with respect to the United States. We may see cycles of stability and repoliticization in the relations between industry and activists, a dynamic that Paterson, Tobin, and VanDeveer highlight in their introductory chapter.

The policies of the financial sector can be a powerful force for policy stability and lock-in. At the same time, they can stimulate a powerful political backlash, especially when they are reinforced by the costly impact of a warmer climate. While private industry pursues incremental change, many people today would argue that we need contentious political debate to generate the political will to take the costly steps that are needed to prevent the climate crisis from getting worse. At the start of this chapter, I posted a quotation from Frederick Douglass, the noted Black abolitionist and statesman. He framed the issue of slavery with a powerful analogy that resonates when it comes to climate action. We do not need the light, we need the fire; not the gentle rain, but the thunder.