The world is now more unsustainable as it has become less inclusive. Developmental environmentalism, a new approach to industrial policy, has increasingly been advocated as alternative development. But, does this developmentalism reduce urban inequalities? How has the implementation of industrial policy reflecting this developmentalist orientation shaped urban socio-ecological experiences? Stratification economics can provide new answers to these questions by redressing methodological problems in existing studies that have attempted to address these puzzles. Based on this approach and data collected from Indonesia’s oil city, Balikpapan, the results suggest that developmental environmentalism may be able to drive growth, but it has also institutionalised social stratification and reinforced unsustainability.