The limits to derisked decarbonization: state capacity unevenness in domestic green transition strategies

With the adoption of the Paris Agreement in 2015, governments around the world committed to developing national plans to reduce emissions and limit average global temperatures to below 2 °C above pre-industrial levels by the end of the century. However, even governments with comprehensive multi-sectoral strategies enshrined in legislation are failing to implement what their own plans set out to achieve. This article analyzes how the dynamics of the global political economy unfold within national bureaucracies and affect the development of state capacity for implementing green transition strategies. Drawing on the case of Chile, the article illustrates how government agencies across three policy areas—green hydrogen, native forestry, and mining—were met with differential efforts to develop state capacity for implementing decarbonization initiatives. Where existing theories suggest that initiatives in sectors with strong incumbent opposition require more targeted efforts to develop state capacity, instead I find that state capacity development is associated with policies’ alignment with the government’s growth strategy and related structural constraints, and the availability of financing for derisking infrastructure investments. State capacity helps to signal project feasibility to potential investors, but limited state capacity in ‘unbankable’ policy areas undermines the realisation of carbon neutrality.