The Economics of a Just Transition

Ireri Hernandez Carballo, Elena Verdolini, Jan Christoph Steckel, Massimo Tavoni and Francesco Vona

No 12357, CESifo Working Paper Series from CESifo

Abstract: Addressing climate change requires policies that are ethically defensible, politically acceptable, and implementable. The concept of a ‘just transition’—a decarbonization process that avoids leaving workers and communities behind and mitigates burdens on vulnerable and historically marginalized groups—has gained prominence in academic and policy debates. This paper bridges these debates with insights from environmental economics. We identify and examine four key dimensions of a just transition—distributional, restorative, procedural, and recognition justice—and use them to map existing economic research. We highlight the contributions and limitations of environmental economics in addressing justice concerns and discuss gaps that future research should address to better inform the design of equitable climate policies.

Keywords: just transition; environmental economics; climate policy; energy transition; decarbonization (search for similar items in EconPapers)
JEL-codes: D63 P18 Q50 Q56 (search for similar items in EconPapers)
Date: 2025
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