The Economics of a Just 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 article bridges these debates with insights from environmental economics. The paper identifies and examines four key dimensions of a just transition—distributional, restorative, procedural, and recognition justice—and uses them to map existing economic research. It highlights the contributions and limitations of environmental economics in addressing justice concerns and discusses gaps that future research should address to better inform the design of equitable climate policies.