For years we’ve been told the same story: the world’s financial institutions are marching in lockstep toward Net Zero, private capital is lining up behind renewables, and the global economy is shifting toward “clean power” whether people like it or not. That narrative collapsed this month, and the Financial Times finally published what many inside the system have been whispering for more than a year: the climate-finance consensus that powered Net Zero strategies from 2021 to 2023 has fallen apart.
This matters for Britain more than most realise. Because while the world is cooling on climate finance, Ed Miliband’s “clean power by 2030” programme is doubling down on the assumptions of a moment that has already evaporated. The gulf between political fantasy and financial reality is widening every week. And if we continue pretending nothing has changed, the costs – economic, social, and strategic – will hit every household in the country.Let’s break down exactly what’s happening.
A Revolution That Never Was
In late 2021, at COP26 in Glasgow, the world was treated to a spectacle of unity. Former Bank of England governor Mark Carney took the stage and declared that $130 trillion in global financial assets had been committed to Net Zero under a new umbrella alliance called GFANZ. The Glasgow Financial Alliance for Net Zero.The message was intoxicating: the banks were on board; the insurers were on board; the asset managers were on board; the financial world was pledging to decarbonise the global economy.But it was all built on an illusion.It turns out that many financial institutions signed up due to political pressure, not conviction. They wanted to avoid being labelled “anti-climate”, especially in the post-Covid, pre-inflation era when green branding looked cheap and risk-free.
Fast forward to this year, and the FT reports an astonishing reversal:• The Net-Zero Banking Alliance has voted to cease operations.• The Net-Zero Insurance Alliance disbanded in 2024.• The Net-Zero Asset Managers Initiative suspended itself after mass withdrawals.• Even the big beast itself BlackRock walked away.These weren’t small players quietly stepping aside. These were the architects of the Net Zero finance movement admitting, one by one, that the commitments they made were either unrealistic, uncommercial, or legally risky.In other words: the 2021 climate-finance moment wasn’t the beginning of a permanent shift. It was a bubble.
Fossil Finance Is Rising -Not Falling
If Net Zero were truly the irresistible economic force its advocates claim, you’d expect banking behaviour to reflect that. You’d expect fossil fuel financing to be collapsing and renewable financing to be soaring.
The opposite is happening.
According to the FT’s analysis, the world’s 65 largest banks increased fossil fuel financing by $162.5 billion last year, reversing two years of decline. Oil and gas companies are still chasing growth. And banks , whose job is to serve real customers, not political soundbites , are still supporting them.
Why? Because fossil fuels remain profitable. They remain essential. And they remain the backbone of the global energy system.Banks don’t care about COP press releases. They care about risk, return, and solvency. And right now, renewables -especially intermittent ones – are delivering none of these without heavy subsidies and favourable regulation.For Ed Miliband, who demands a fully decarbonised power system by 2030, this is a catastrophic signal. His plan depends on a flood of private investment in renewables, green hydrogen, storage, grid reinforcements, and transmission corridors. But the financial sector is quietly walking away.
US Politics Has Killed the Global Net Zero Consensus
There is a blunt political story here too.
While the UK and EU continue to legislate climate targets as legal obligations, the United States – the world’s largest financial market -has moved into open revolt. Republican-led states have accused climate-finance alliances of violating fiduciary duties and antitrust law. They’ve pulled billions in state pension funds away from members of these alliances.With Trump back in the White House, the tone has hardened further. Tax credits have been cut. Renewables have been publicly mocked. And financial institutions have been warned that over-emphasising ESG could land them in court.Climate finance is now a political liability in the world’s dominant market And yet Ed Miliband behaves as though the US is still a partner in the 2021 Net Zero push. He pretends the international consensus remains intact. He pushes infrastructure and planning reforms on the assumption that the world is still moving as one.It isn’t.
Britain is drifting into ideological isolation while our largest trading and financial allies are slamming the brakes.
Pension Funds: The Last True Believers – But Not the Solution
The FT notes one exception: pension funds, particularly in Europe, are still pushing for strong climate action. Their time horizons stretch 30 or 40 years ahead, so long-term climate risk makes sense in their worldview.But while pension funds can apply pressure on asset managers, they can’t build the infrastructure. They can’t deliver the grid reinforcements. They can’t build 700 km of new transmission lines. They can’t deploy baseload capacity, nuclear reactors, synchronous compensators, or utility-scale long-duration storage.Their influence is strong in boardrooms – but close to zero on construction sites.Ed Miliband is claiming these long-term investors will help deliver a 2030 system transformation. That’s nonsense. The only investors capable of delivering the physical infrastructure required are commercial developers, private equity, institutional capital, banks, insurers, and sovereign wealth funds – all of whom are now pulling back.Pension funds cannot fill this gap.
Renewables Are Facing Market Reality, Not Political Rhetoric
Green-tech stocks are rising again, but not for the reasons politicians like to pretend. The FT highlights that US clean-energy equities are being pushed partly by AI data-centre power demand, not by climate commitments. AI firms need power – lots of it and renewables offer hedging opportunities. But this does not mean solar or wind are providing the reliable 24/7 power these facilities actually need.The truth remains unchanged:• Solar peaks in summer and collapses in winter.• Wind is volatile and often fails during cold snaps.• Storage still provides only 2–4 hours of energy.• The grid cannot integrate high levels of uncontrollable power without massive curtailment.• Baseload demand is rising faster than renewable capacity can be built.So while investors chase pockets of opportunity, they are not building the real grid Ed Miliband needs for 2030.There is a growing disconnect between political timelines and engineering timelines. And that gap widens every year.
The Global Climate Finance Bubble Has Burst — But Westminster Pretends It Hasn’tThe FT article unintentionally exposes the biggest flaw in the UK’s current energy strategy: the assumption that the world is still operating under the 2020–2022 Net Zero optimism.Since then:• Inflation exploded.• Capital costs rose.• Interest rates killed low-margin renewables.• Grid constraints halted new connections.• Offshore wind auctions collapsed.• Battery storage fires multiplied.• Hydrogen projects stalled.• Transmission delays reached 10–12 years.• Fossil financing surged.• US climate policy fractured.• The financial alliances disintegrated.And yet the UK is still legislating Net Zero as though nothing has changed.That is the real story here. Not that banks have abandoned climate alliances, but that Britain’s energy policy is now built on assumptions that no longer exist.Ed Miliband has staked his political identity on delivering fully fossil-free electricity in just five years. But the conditions required for that miracle vanished long before he took office.
If the Money Walks Away, the Policy Is Dead
Energy transitions don’t happen because politicians want them. They happen when:• technology aligns with demand,• infrastructure can carry the load,• capital flows into viable projects,• and markets support the change.None of this is happening for the 2030 plan.You cannot deliver a complete national grid transformation in five years without the backing of banks, insurers, and asset managers. You cannot electrify heat, transport, industry, and housing on a network already suffering from decade-long delays. And you cannot run a G7 economy on intermittent power, short-duration batteries, and blind optimism.The FT article is a warning shot: the financial world has moved back to reality. But Westminster is still legislating based on 2021 fantasies.The longer this contradiction continues, the higher the cost to the British public , in bills, in reliability, in national competitiveness, and in political trust.
Britain Needs an Energy Policy Based on Physics and Finance. Not Fantasy
The great unraveling of climate finance is not a defeat. It is an opportunity.It forces us back to first principles:• secure, reliable power first;• a grid that actually works;• baseload before ideology;• public consent before planning coercion;• domestic industry before imports;• sovereign capability before dependency.We can still build a resilient, modern, low-carbon energy system. But it won’t be delivered through wishful thinking, collapsing alliances, or a 2030 cliff-edge designed to impress climate conferences rather than serve the British people.The world has changed. It’s time UK energy policy caught up.
Shane Oxer Campaigner for fairer and affordable energy
SAY NO TO THE DESTRUCTION OF OUR LAND 
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