Mariana Mazzucato has long argued that governments shouldn’t just fix market failures, they should actively shape economic growth.
The Italian-American economist, who has held a range of high-level policy roles at multilateral bodies, is currently director of University College London’s Institute for Innovation and Public Purpose.
Her latest book, The Common Good Economy, provides a compass for navigating towards economies that “work for everyone”.
Now, she is turning her attention to an overlooked aspect of climate strategy: culture.
In this interview with Dialogue Earth, Mazzucato explains why art, local ritual and creative practice are as important to a green transition as power grids. She describes why technocratic plans fall short without community participation, and highlights the need to ensure AI doesn’t increase inequality.
The interview has been edited for length and clarity.
Dialogue Earth: You’ve argued culture is fundamental to tackling the climate crisis. What convinced you of that?
Mariana Mazzucato: The current approach is not working. Climate solutions are being framed as disconnected from how we structure the core of capitalism and hence the direction of economic growth. Economic growth is not a neutral good. Growth has a direction, not just a rate, and we need a green transition people can imagine as part of a good life.
I write in my new book that culture, wellbeing, joy and human flourishing are the point of the economy. The question is how we structure economic tools to deliver it. As Celso Furtado, Brazil’s former culture minister, said: “Cultural policy is development policy.”
A recent paper of yours informed a seminar bringing together a climate COP president, a stage designer, an Indigenous leader, a musician and a climate scientist. What emerges from a room like that which wouldn’t in one full of economists?
It’s not a coincidence that Franklin D Roosevelt brought artists and designers into the New Deal’s Work Projects Administration. Arts and creative practices have a huge impact on shaping what we think is possible.
As French writer Antoine de Saint-Exupéry said: “If you want to build a ship, don’t drum up people to collect wood… teach them to long for the endless immensity of the sea.”
Secondly, there’s no single expert blueprint for how we succeed at the green transition, or even what success looks like. That’s where the common good compass comes in. It has five elements: purpose and directionality; co-creation and participation; collective learning and knowledge sharing; access for all and rewards sharing; and transparency and accountability.
For example, I wrote with my colleague Damon Silvers about the US autoworkers’ strike, where it was the voices of workers themselves that pushed for good jobs in the electric vehicle industry.
Culture needs to be integrated into industrial policy, not siloed
Why does culture need its own dedicated research strand, rather than being a footnote in industrial policy?
I wrote a paper, Climate Change and Culture, on working with communities, not at them. Using the knowledge and resources already there rather than imposing fixes from outside.
In it, I give two contrasting examples. The UN REDD+ framework, applied to the Amazon Fund, was informed by McKinsey opportunity-cost calculations that made extractive industry look more valuable than smallholder rotational farming by traditional peoples.
In contrast, Project Esperaçar, in the Brazilian Amazon’s Chico Mendes Extractive Reserve, recognises traditional culture and forest care as linked, and supports both. That’s why culture needs to be integrated into industrial policy, not siloed off.
You’ve argued that government shouldn’t outsource health or industrial policy. How does that translate to climate and culture?
Public institutions need the ability to design and implement policy for an economy that serves people. The common good economy’s compass helps with the “how”: co-creation, knowledge-sharing, transparency.
None of that works if government opaquely outsources climate policy to consultancies. True consultation and listening is one key capability missing. If people don’t feel included, policy will be less effective, less resilient, or outright opposed. To transition well, we must govern well, and differently than we have been.
Brazil’s COP30 was billed as an implementation COP, advancing plans to mobilise climate finance and a Just Transition Mechanism. Is that a genuine shift to delivering finance, or are we still producing plans faster than we can implement them?
Governments are often more interested in launching new plans than maintaining existing ones. We need to co-create the right plan and stick with it.
Secondly, it’s not just the money, it’s how that money is channelled and who benefits. Too often public money just “fills a gap” instead of anchoring a project. Development banks can play a crucial role by taking a mission-oriented approach to how capital is mobilised, and we need these institutions’ partnerships with the private sector to be truly reciprocal.
With the US pulling back from multilateral climate cooperation and tariffs reshaping global trade, how do climate finance and green industrial strategy get built?
The economic order was already broken. We need to build something different in its place, that works for people and planet rather than more inequality or extraction. We won’t get that from incrementalist tinkering, or from far-right, reactionary populism and ad-hoc tariffs.
We need to be bold: shaping the economy, financing for impact, building capable states, and forging collaborations for global equity. That’s why I launched the Global Council on New Economics for the 21st Century, bringing together policymakers, academics and practitioners to rethink assumptions shaping societies.
How can countries use renewables and critical minerals to move up the value chain, rather than repeat the damaging extractive model of the fossil fuel era?
That’s exactly the risk. Seventy per cent of critical minerals are in the Global South, and actors like the US government are pursuing extractive, bilateral deals that avoid fair terms on taxation or environmental regulation.
We need greater coordination to prevent geopolitical bullying and a race to the bottom on standards. And governments need to be proactive about how their green industrial policy builds an innovation ecosystem.
Data centres and AI are among the fastest-growing sources of electricity demand. Is AI, as financed and governed, compatible with the green transition?
AI, like most innovations, is not inherently good or bad. It’s about how it’s deployed and who decides.
AI governance should serve the common good through direction, transparency, co-creation and shared rewards. The issue is what I called “digital feudalism,” where a small number of companies have almost complete control over AI governance despite public institutions having subsidised the intellectual and physical capital AI development relies on.
The creators behind the art and content that power AI tools are being extracted from rather than rewarded.
AI development isn’t a competing mission to the green transition, but the two need to be designed to complement each other rather than compete. We don’t want data centres depleting essential water supplies to fund AI uses that aren’t steered by the common good. That’s the worst of both worlds.
Much of the Global South is squeezed by debt while also being asked to finance a just transition. What would a genuinely mission-oriented approach to that debt challenge look like?
We need a new global financial and debt architecture. Barbados PM Mia Mottley is leading the Bridgetown Initiative with proposals connected to climate finance. We need to reform global tax systems, which means changing rules like the World Bank-IMF Debt Sustainability Analysis framework, which treats long-term investment like short-term expenditure.
The last section of my book looks at bringing Global South countries to the centre. A mission-led approach matters so these efforts are aligned rather than disjointed, with real focus on implementation, like fair contracts, so development finance is treated as a mission to be led, not just a gap to be filled.
You’ve argued markets are the outcomes of political choices, not forces outside government control. What’s the biggest misconception policymakers still have about the state’s role in the green transition?
Firstly, that their job is to fix the mess markets have left, rather than actively shape markets for collective outcomes. Secondly, approaching industrial policy sector by sector instead of mission by mission. In the UK, the Department for Energy Security and Net Zero has made progress on the mandates it controls, but it’s limited without an inter-ministerial, cross-sectoral approach to the clean energy mission. We can’t have one department solving emissions while another generates them. And policymakers need to bring people along with them, which is where we need culture.
