Just Transition Planning Toolbox

Political economy as a research field looks at the way different material interests, institutions, and norms shape the behavior of social and economic systems. Political economy analysis contributes a nuanced understanding of the unique features and conditions of individual countries or subregions within countries, including interactions between social, cultural, political, and economic forces. It should also help to position the transition in a historical context, by describing how and why regions and sectors look as they do today.

Understanding the political economy can help to anticipate the likely trajectory of a transition. It also helps in identifying who may resist change (i.e. stakeholders who benefit from the status quo, norms and institutions that maintain and reinforce today’s economic patterns, and the financial or other economic incentives that might create lock-in) and where support and/or resources may come from (i.e. groups who see potential benefits). It should also identify how power is distributed – and the way this affects material outcomes for different groups.

Political economy analysis can inform subsequent assessments of risks and opportunities, as well as the design of stakeholder engagement activities. It can also inform the selection of strategies seen as most feasible or effective in promoting the transition and in managing its impacts. For instance, it should highlight how existing norms and institutions, including legal structures, might affect the potential to achieve transition or to ensure just outcomes for different groups.

As an analytical method, it involves looking at how structures (e.g. financial incentives), institutions (e.g. laws, mandates, norms, or ideas) and actors (stakeholders) interact dynamically and influence decisions. It can be undertaken at a macro, local, or sectoral level. The questions explored by a political economy analysis can be tailored to the specific needs of planners and decision-makers.

Some elements of a typical political economy analysis might be conducted as a stand-alone activity (and so are described in this module separately), including stakeholder mapping (see Module 2.2.2) or policy and institutional mapping (see Module 2.2.3).

Stakeholder mapping (or “stakeholder analysis”) is a useful early step in bringing together a variety of perspectives on problems and solutions. It can help to formulate engagement strategies for different stakeholder groups, to pinpoint representative groups/associations who may act as conduits for wider community engagement, and to inform wider political economy analysis.

Stakeholder mapping aims to identify relevant stakeholders (and, ideally, anticipate how each group might be affected by a transition), to illuminate how stakeholders are connected to one another, and to note who is most visible in transition discussions, and who is absent. It should also identify different groups’ perspectives on key transition issues, their strategic interests, as well as the knowledge, values, and influence they might have that is relevant for transition planning.

A stakeholder mapping exercise should look beyond the triad of government, employers, and worker representatives, and also look beyond sectoral boundaries, because achieving a just transition requires a wide range of knowledge and expertise. In the case of workers who may be affected by transition, the mapping should identify informal (and sometimes illegal) workers who are operating in an economy and who may not be represented by labor unions.

Particular attention should be paid to marginalized stakeholders who may not feature in current debates. Even within a single group, there can be wide inequalities and power imbalances. For instance, a group representing farmers may not represent the views and needs of all farmers – and the farmers are likely to have different perspectives than farm workers (including seasonal, non-unionized, and migrant workers), businesses and employees along the value chain, the wider community that depends on agriculture, and young people.

Mapping approaches can be relatively simple or quite sophisticated. As results are collected, there different methods can be used for visualizing stakeholder maps: for example, graphs that show networks of connected actors, or graphs that position different groups according to their influence or strategic interests.

For a just transition to succeed, the broader policy ecosystem – both domestic policies and international commitments (e.g. in nationally determined contributions, or NDCs) – needs to be well aligned with just transition objectives. The institutional environment also needs to be oriented towards supporting a just transition, and not impeding or disincentivizing any of the key strategies.

Policy mapping helps to explore how existing policies and commitments either support, or constrain, the promotion of a just transition, and can indicate how existing policies (or gaps in policy) may need to be reformed to support the objectives of a just transition. This activity can help avoid the problem of individual “transition plans” (e.g. at a local level) heading in different directions or being incoherent with other (e.g. national) policies.

The scope of policy mapping is broader than climate or green economy policies, since many different areas of social, economic, environmental, and climate policy will shape transition outcomes. Depending on the nature (and sector) of transition – and the context – policy mapping might also include regional/territorial socioeconomic development plans, sectoral development plans, as well as policies and regulations related to agricultural production, energy supply and energy markets, land tenure, women’s empowerment, social protection, finance and taxes, the labor market, and the mining sector, among others.

Similarly, institutional and governance assessment can shed light on whether there are suitable institutions in place to support transition planning and implementation. It should also highlight where there may be conflicts or discrepancies and propose solutions, which may require aligning different institutions with just transition objectives. Again, the institutional assessment needs to look well beyond an individual sector, since many of the barriers to just transitions – and the levers for change or support – exist in other parts of government.

These activities should help with the framing of early stakeholder engagement (Modules 1.1 and 1.3), with stakeholder mapping (Module 2.2.1), and also with the development of a just transition vision and set of principles (Module 2.3).

Gender disparities – and gender-based differences in how people are likely to experience a transition – are a key aspect of the socioeconomic context that needs to be understood in order to ensure just outcomes and design a just and inclusive process. Many of the tools used in gender analysis also take an intersectional approach, recognizing that each person’s multiple, overlapping identities – gender, race or ethnicity, age, (dis)abilities, etc. – all affect their relative advantages or vulnerabilities.

A gender analysis will start by exploring how transition risks and opportunities are distributed. The workforce exposed to job losses in some high carbon sectors, such as energy and mining, is often male-dominated, but if men lose their jobs, that may transfer greater burdens onto women. This, in turn, can reduce the time women have for education, for engaging in business, or even to access health services when needed. Rising unemployment is sometimes associated with higher rates of gender-based violence. Gender disparities may also affect women’s relative capacity to adapt to new conditions. Women often make up a significant portion of farmers and farm laborers, for instance, but are far less likely than men to have land tenure, which makes them more vulnerable to systemic changes.

A gender analysis can also identify opportunities to redress some of the existing inequalities – based on gender or on multiple factors – by designing measures that target the root causes of those inequalities (see Module 4.2).

It is important to conduct robust, context-specific and intersectional gender analyses that illuminates the types and causes of gender inequality, and how it affects how transition impacts may be experienced.

Studies of background gender inequality and vulnerability should consider indicators such as local labor market participation, and access to education, health services, finance and social protection systems (see Module 2.2.6). These should also be disaggregated by other social variables, such as age.

Background studies should be complemented by analysis of gender specifically in relation to the transition(s). This is done by integrating a gender lens into the various analyses that are undertaken when preparing just transition strategies (see Module 3) – such as assessments of labor market dynamics, economic impacts and diversification options, environmental risks and cleanup priorities, and other social impacts.

A lack of gender-disaggregated data, especially at the local/municipality level of affected territories, can constrain the depth of gender analysis. Conversely, making a point to strengthen data collection and analysis mechanisms to increase the availability of disaggregated data can not only support better transition planning, but also future monitoring and evaluation.

The concept of multidimensional poverty (MDP) reflects that many factors beyond financial constraints shape people’s experience of poverty, reflecting differences in living standards and in access to key resources and services. It is important to understand the various sources of hardship experienced by people in communities affected by a transition, so as to design strategies that avoid exacerbating poverty and hardship, and instead help to improve conditions.

Multidimensional poverty analysis identifies key “deprivations” that people may suffer – such as poor nutrition, inadequate housing, or lack of basic services such as electricity and sanitation – and how these are distributed across different populations. It reveals who is most vulnerable and how, and highlights where people are experiencing overlapping deprivations.

MDP analysis helps to identify policies and programs that might address key socioeconomic deficits and reduce poverty. It can guide the design of transition support measures specifically, particularly so that policy measures or programs – including reforms to social protection systems – can be targeted to groups or communities where poverty is particularly acute (or where there is high risk because of the transition).

For some countries and regions there may already be existing indices of MDP which can be a useful starting point for on-site analysis of MDP. Depending on data availability, indices may look at traditional monetary poverty measures alongside data about education, health, living standards, employment, and safety, for instance.

National-scale data alone are unlikely to provide a sufficiently deep understanding of how specific communities, or groups within communities, may be affected by socioeconomic changes. Thus, some form of disaggregated MDP analysis – at the regional, local, and even household level – can help to fill in these knowledge gaps. However, MDP-related data disaggregated by region may be difficult to find.

Social protection systems (sometimes referred to as safety nets, social welfare, or social assistance programs) are measures that provide poor and vulnerable people with regular support, monetary or otherwise. The goal is to reduce their exposure to risks, buffer them against income loss or volatility, and sometimes to enhance their access to labor markets.

Social protection programs are often delivered by governments, but some may also be delivered by other actors, such as civil society organizations. They might include social assistance programs that provide a level of income and/or access to basic services (e.g. cash transfers, social pensions, or childcare services); social insurance programs that provide income support under certain circumstances (e.g. social security schemes, health insurance, business insurance, or agricultural insurance); and labor market programs that help to reskill or retrain prospective workers and/or facilitate employment (e.g. through supply–demand matching, employment-generating public works schemes, or ensuring minimum labor standards and working conditions).

Preparing a country-specific social protection profile can illuminate the coverage, benefit incidence, adequacy, poverty impact, and expenditures of various existing social protection programs, and to identify gaps. This should also assess whether existing measures are gender-responsive (i.e. target men and women equally and do not inadvertently increase gender inequality), and whether they materially benefit the poor. By looking at the types of protections currently in place, and who the beneficiaries are, social protection system analysis can help planners to identify opportunities for current measures to be scaled up, or refined (e.g. through policy reform), and where gaps need to be addressed, in order to support particular groups affected by transition. It should help to avoid the perverse outcome of transitions increasing inequality, which might occur if benefits compensate wealthier people or corporations, for instance, rather than assist vulnerable and poor groups.