This chapter examines the socioeconomic factors that influence governments’ abilities to envision and implement an effective climate response. Drawing on lessons from former industrial transitions, the authors emphasize the significance of local political economy dimensions. They advocate being proactive about engaging stakeholders and formulating exit strategies and offer recommendations on how to incorporate these dimensions into the development of robust, long-term, low-emission strategies.

In addition, the authors examine the potential impact of carbon pricing on households and offer lessons from past experiences with fossil-fuel subsidy reforms. They then examine the impact of climate mitigation on workers, highlighting specific aspects of former transitions from around the world.