The decarbonization of the global economy, though likely to enhance aggregate well-being, will create many losers. More numerous, more stringent and longer-term climate policies are needed to achieve climate objectives, requiring governments to develop systematic, principled policy approaches to address transitional losses, i.e. transition policy (perhaps as a pre-condition for deep climate change mitigation). This article provides a framework to structure the design of transition policy for climate mitigation and thereby aims to serve as a first step to address this gap.

This paper provides policymakers a framework for developing systematic, principled policy approaches to address transitional losses in response to climate action. The authors identify the parties adversely affected by structural changes related to climate change mitigation, explore the range of losses (financial and non-financial) caused by these changes, and classify potential policy responses according to varying policy objectives. They then combine all these elements to provide typologies of transition policies. Together, these typologies define the landscape of possible approaches, which the authors recommend policymakers normatively evaluate according to three criteria: fairness, political transformation potential, and expected effectiveness.

Given the general lack of transition policy literature aimed at informing policymakers and civil society actors, the paper offers recommendations for how to build upon this work. It concludes with an appendix, which provides an overview of literature relevant to transition policies for climate mitigation and transition policies more generally.