A shift in international climate policy discourse toward a new shared narrative on the need for a ‘transition’ to a low-carbon society and green economy is outlined and assessed in terms of its implications for innovation policy. It is seen as recognition of the limits of incrementalism and the need for pervasive transformative innovation. Key passage points are identified in the early 2000s through which new ideas about transition moved from academic discussion into policy practice. Transitions thinking expresses a new synthesis of evolutionary and associational approaches in science, technology and innovation studies. It introduces concepts of sociotechnical networks and configurations which fulfil core societal functions of consumption and end use. The agenda for innovation shifts from the traditional macroeconomic or microorganisational level, to a new focus on a range of situated sociotechnical transitions at the mesoregime level. The real world of contemporary innovation policy is assessed in terms of the new policy measures for the transformative innovation implied by this different perspective. A contradictory picture is found of new challenge led, demand oriented, systemic initiatives muddled with a legacy of technology driven, supply side, singular approaches. Evidence is given of how new computer based visualisation analysis of the global energy system reveals that its overall complexity may be addressed through a small number of fundamental end-use or consumption categories. It is argued that these offer the opportunity for a fundamental reframing of innovation policy for the experiments and arenas needed for sociotechnical transitions which are not predetermined by technology-driven choices.