Climate policy has become a central pillar of economic strategy, informing industrial policy and influencing labour, housing and distribution. The 2025 UK spending review front-loaded net‑zero infrastructure with a 16% real-terms boost to the Department for Energy Security and Net Zero, amounting to roughly £49bn in climate investments over five years.
Recent Bank of England climate stress tests have highlighted significant financial risks for regional banks under a disorderly transition scenario, raising concerns about loan performance in areas already affected by industrial decline. Yet, even as this significant investment marks a step forward, concerns have emerged that the plan may reinforce existing regional divides rather than bridge them.
Understanding the political terrain of the green transition is no longer optional. Class dynamics are emerging as a powerful fault line in the politics of decarbonisation and if left unaddressed, they risk destabilising not only climate ambition, but the very democratic legitimacy of the institutions behind it.
Net-zero pushback
Since the 1980s, identity politics, consumer segmentation and technocratic policy-making have eclipsed class as a lens for economic analysis. Meritocracy reframed inequality as a matter of personal failure, not structural design. Centre-left parties shifted their base from organised labour to urban professionals. And climate policy, too, followed this arc: increasingly framed in terms of carbon, not conflict.
Yet class has not disappeared. It remains central to the architecture of modern society and the carbon economy. For over a century, fossil fuels powered a labour model rooted in heavy industry, logistics, mining and large-scale agriculture; sectors that offered stable, if precarious, livelihoods to millions. Today, these sectors and their communities are at the frontline of the green transition, often with little say in how it unfolds.
As the carbon-intensive economy contracts, what’s emerging to replace it often resembles a dislocation more than a just transition. Across Europe and North America, right-wing populist movements are capitalising on this fracture. From the Alternative for Germany political party to the Netherlands Farmer-Citizen Movement and the Republican Party in the US, climate action is increasingly portrayed as an elite agenda imposed by urban cosmopolitans on industrial and rural working-class communities. The result is a volatile convergence of class grievance and cultural backlash – threatening climate progress, economic cohesion and democratic resilience.
From consensus to contention
But the backlash is not an irrational opposition to science or sustainability, as some analysis suggests. In many cases, it is a rational response to exclusion from economic security, political agency and the material benefits of transition.
In regions where the last major employer is a coal mine, oil refinery or combustion-engine plant, climate policy feels less like long-term investment and more like immediate loss. The reality on the ground reflects the perception that ‘green’ jobs remain unevenly distributed, while the costs of transition, from fuel taxes to heating upgrades, fall heavily on low- and middle-income households.
These political dynamics closely mirror the politics of globalisation in the late 20th century when like now, sweeping reforms were presented as technical inevitabilities. Globalisation was marketed as a tide that would lift all boats, but in practice, lifted capital while hollowing out industrial heartlands. The social contract was weakened, labour protections eroded and social mobility became both a promise and a threat.
We risk repeating these mistakes with the green transition’s emphasis on models, pathways and market mechanisms, which often obscures the fundamental questions: who pays, who benefits and who decides?
Building democratic resilience
History offers an alternative. After the second world war, western economies underwent complete reconstruction – a shift that embedded equity at its core. Governments invested in full employment, public infrastructure and robust social protections and safety nets. This transition acknowledged class power and negotiated with it. It was not free of conflict, but it built durable coalitions and shared prosperity. Its lesson is clear: transitions that embrace distributive fairness succeed more often than those that avoid them. Truly democratic order requires constant conflict over ideas and interests, not the suppression of dissent.
Climate thinkers such as Andreas Malm and Matthew Huber have underscored this point in the context of environmental policy. Malm argues that decarbonisation must confront, not accommodate, entrenched economic interests and that emissions reduction without redistribution will fail both politically and ecologically. Huber calls for climate policy that aligns directly with working-class interests, not just in abstract environmental benefits but through real changes in ownership, wages and job security.
These ideas are not theoretical luxuries. If climate action is to survive democratic scrutiny, it must be seen to deliver tangible, fair and inclusive outcomes which have implications for all institutions. It means designing climate finance and carbon pricing regimes with progressive redistribution built in; embedding social dialogue into green industrial strategies, including with unions and subnational governments; investing in regional economic resilience to avoid concentrated transition shocks; and encouraging public ownership or participation in new green infrastructure, from energy to transit.
Perhaps most importantly, it requires recognising that climate is not just about carbon, it is about economic, political and cultural power. A truly just transition must be co-created with the people most affected by it, not simply explained to them after the fact. If climate policy is to command legitimacy, it must also reconnect with the language and realities of class – not just to win elections, but to forge the broad-based coalitions required to carry the transition through its inevitable frictions.
Depoliticising the transition, treating it as a technical fix, has already provoked political backlash. The alternative is harder but more democratic: to politicise the green transition openly, to contest its direction transparently and to design it with justice at its centre. Because as Antonio Gramsci theorised, conflict is not the problem. Ignoring it is.
Sofia Melis is Chief Revenue Officer at OMFIF.
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