This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: The transition to a low-carbon economy will not affect all people and places equally. Although its overall benefits may outweigh its costs, workers may lose jobs, households may face higher prices and communities dependent on carbon-intensive industries may experience lasting economic and social disruption.
A new study led by CMCC researchers reviews how environmental economics can help make this transformation fairer. Published in the Review of Environmental Economics and Policy, the research assesses existing evidence through four dimensions of justice: how costs and benefits are distributed; how harms are repaired; how decisions are made; and whether communities' identities and values are respected. "Economists have studied the distribution of costs and benefits extensively, as well as some forms of compensation.
But we need more evidence on broader transition support, fair and meaningful participation and respect for community identity," says Hernandez Carballo, who believes that the study helps identify ways in which researchers can help fill those gaps and inform effective climate action. The transition to a low-carbon economy creates major environmental and climate benefits, including for the most vulnerable individuals. Research also finds that overall, new job creation related to the energy transition can more than offset job losses in fossil fuel industries.
However, new jobs may not appear where old jobs disappear or offer the same pay, and workers may need different skills. For example, older workers, women and people with vocational credentials may face particularly high costs when displaced from carbon-intensive industries. There are ways of countering these unequal effects.
For example, policy design can determine how costs are shared among households. Returning carbon-pricing revenues to citizens can reduce the burden on lower-income groups. By contrast, some evidence suggests that energy-efficiency standards can weigh more heavily on poorer households than carbon taxes with revenue recycling, while subsidies for solar panels or electric vehicles may favor people able to afford the initial investment.
These findings highlight the importance of policy design in ensuring that the transition is implemented in a just manner. "The evidence shows that climate and environmental policies can deliver major benefits, but their costs and benefits may not affect everyone in the same way," continues Hernandez Carballo. Although there is a wide body of knowledge on the financial costs of climate policies and how compensation can address them, there is far less research on procedural justice—whether decision-making is transparent and inclusive and gives affected groups genuine influence—and recognition justice, which concerns respect for communities' dignity, culture and ways of life.
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