Sustainability In An Age Of Strategic Disorder – Analysis
By Soumya Bhowmick
For much of the last decade, sustainability was framed through targets, metrics, and transition pathways, under the assumption that ambitious government commitments, market adjustments to climate risk, and sustained multilateral momentum would gradually move the world towards a greener and more resilient future. That assumption now appears increasingly inadequate. Sustainability is pursued in a global environment shaped by conflict, debt stress, trade restrictions, and geopolitical mistrust, raising a broader question: can the international system still protect long-term public goods while responding to immediate strategic pressures?
The tension is evident in current trends. Only 35 percent of SDG targets are on track or making moderate progress, while nearly half are advancing too slowly, and 18 percent have regressed; at the same time, global military expenditure rose to US$2.718 trillion in 2024, the sharpest annual increase in decades. The issue, then, is not simply one of inaction. States are acting, but much of that effort is being directed towards deterrence, industrial competition, sanctions management, and short-term crisis response rather than adaptation, social resilience, or developmental recovery.
At the centre of this challenge lies a reality that today’s sustainability crisis is also a financing crisis. Developing countries are being asked to decarbonise, adapt to climate change, generate employment, strengthen social protection, and modernise infrastructure even as their fiscal room narrows. The adaptation finance gap for developing countries remains between US$187 billion and US$359 billion per year, despite the gradual increase in public adaptation flows.
At the same time, debt burdens have become more restrictive with rising interest payments reducing the share of government revenue available for other public spending in 99 developing countries between 2018 and 2024, while official development assistance fell by 7.3 percent in 2024 even as financing needs increased. Sustainability is therefore not faltering because developing countries fail to recognise its significance, but because too many states are being asked to meet ambitious developmental and climate responsibilities under tightening financial conditions and limited access to affordable capital.
This is also where the foreign-policy dimension of sustainability becomes especially important. Wars and geopolitical confrontations no longer remain confined to their immediate theatres; their effects now travel through shipping routes, commodity prices, energy markets, insurance costs, inflation expectations, and capital flows. The sustainability debate still often treats strategic and developmental concerns as separate domains, but that distinction is increasingly difficult to sustain. In fact, in a world shaped by repeated supply disruptions, weaponised interdependence, and crisis-driven policy responses, inclusive green transitions are harder to achieve, especially for economies that remain energy-import-dependent, capital-constrained, and exposed to external volatility.
The present moment is better understood as one of reconfiguration rather than deglobalisation. India’s Economic Survey 2024–25 notes that more than 24,000 new trade and investment restrictions were introduced globally between 2020 and 2024, while the World Trade Organisation describes the current phase as one of “reglobalization”—not a retreat from integration, but its restructuring around resilience, technological capability, and climate-related adjustment. This shift matters because it reveals a broader change in the sustainability debate, where the green transition is no longer only developmental or environmental but also geopolitical, with clean technologies, critical minerals, subsidies, and standards becoming instruments of strategic positioning.
India, Global South, and the Terms of Transition
This shift has major implications for the Global South. If the transition is driven less by developmental need than by bloc politics, subsidy strength, and technological advantage, sustainability may remain universal in principle but uneven in practice. Late industrialisers may be pushed to move faster under financial and regulatory conditions they did little to shape, even as advanced economies shield domestic industries through subsidies and stricter standards. The issue, then, is not whether the transition will occur, but on what terms and at whose cost.
For India, this changing landscape presents both constraints and opportunities. India remains exposed to volatility in imported energy, shifts in global financial conditions, and the wider turbulence of an international economy being reshaped by strategic rivalry. At the same time, this context allows India to articulate a more grounded position on sustainability, one that treats it not as an argument for restraint alone, but as a question of development-compatible resilience. The International Energy Agency notes that 83 percent of India’s power-sector investment in 2024 went to clean energy, indicating that growth, energy access, and transition need not be treated as competing objectives.
Yet India’s experience also underscores that ambition alone is not enough. India must also manage the transition under tighter external and domestic constraints. The share of CBAM-covered exports in India’s exports to the EU rose from 6.3 percent in 2014 to 10.5 percent in 2023, especially in iron and steel, suggesting that carbon-linked trade measures could raise compliance costs and affect competitiveness in key sectors. At the same time, India’s cost of capital for grid-scale renewables remains 80 percent higher than in advanced economies, while distribution companies owed more than US$9 billion in unpaid dues as of March 2025, highlighting the extent to which financing and off-taker risks continue to constrain the pace of the transition. The cost, availability, and architecture of finance remain decisive, which gives India a credible basis from which to argue for a different global compact: one in which late industrialisers are not effectively penalised for later starting points, and in which climate responsibility is matched by affordable capital, technological openness, and policy space.
Finally, sustainability can no longer be treated as a specialised agenda separate from the wider structure of world order. Its future will be shaped as much by debt, trade, technology, and strategic stability as by climate negotiations alone. More broadly, if development finance weakens, trade becomes more exclusionary, and geopolitical rivalry continues to crowd out cooperation, the problem will not be a lack of knowledge but a failure of priorities. The central question is whether resilience can be secured as a broader public good, rather than becoming concentrated among those with greater strategic and financial insulation.
This article is based on the author’s intervention as a panellist at the Indian Institute of Foreign Trade (IIFT) Annual Economics Conclave 2026 in Kolkata, India, on the theme “Divided World, Shared Crisis: The Future of Sustainability.”
- About the author: Soumya Bhowmick is a Fellow and Lead, World Economies and Sustainability at the Centre for New Economic Diplomacy (CNED) at the Observer Research Foundation.
- Source: This article was published by the Observer Research Foundation.