The Economics of the Just Energy Transition

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.