This paper explores which regions, sectors, and groups could be adversely affected by a rapid low-carbon energy transition and offers lessons from previous transitions that could minimize the adverse impacts of current and future transitions. The authors discuss the broader distributional impacts of low-carbon transitions. These include the effect of higher energy costs on poor and middle-income households due to carbon pricing or the removal of fossil fuel subsidies, the implications of lost fossil fuel-related revenues for specific countries and regions, the impact on regions and workers heavily dependent on carbon-intensive industries, and the potentially adverse consequences of rapidly deploying low-carbon technologies.
The paper presents a high-level review of existing literature on energy and non-energy transitions. While the authors focus on the distributive consequences of energy transitions, they also explore how equitable transitions are achieved. They provide examples and brief summaries of policy mechanisms incorporated in previous transitions. Based on their review, the authors identify common features of successful transitions: foresight and timing, social dialogue and coordination among stakeholders, short-term protections coupled with active government involvement in reindustrialization, and assistance to those potentially impacted by higher energy prices