How do insights from environmental politics of the 1970s–1990s inform our understanding of contemporary climate governance? I suggest that the governance response for addressing pollution problems of the 1970s–1990s was sequential. The first wave of governance interventions addressed market failures; the second wave targeted government failures. In contrast, climate governance seeks to correct both market and government failures simultaneously. Furthermore, unlike first-generation environmental problems, domestic and international factors together hinder progress on climate change. Theoretically, this article examines how governance failures are recognized and addressed, how and why backlashes arise, and which governance innovations are possible in contested policy spaces. Three lessons emerge. First, governance innovations should be sculpted with failure drivers in mind. Because political challenges stall climate progress, climate policy must address these political concerns. Second, governance innovations cannot be expected to deliver a perfect solution devised by a technocratic elite. Policy progress is uneven, slow, and incremental. Third, governance arrangements, even on arguably highly technocratic issues, require social and political licenses to operate. Instead of asking the public to “listen to science,” climate-policy advocates should listen to people and devise policies that the public views as improving their everyday lives.