Just Transition behind the Veil of Ignorance

Just transition has moved from the margins of climate debate to the center of energy policy, with governments, financial institutions and corporations committing to ensure that decarbonization remains socially inclusive and economically equitable. In practice, just transition is oftentimes framed in operational terms: ESG commitments, stakeholder engagement processes, reskilling programs, community benefit funds. These instruments matter, and they address real consequences of structural economic change.

I would like to reflect on what constitutes justice in the context of structural economic transition, particularly in countries where extractive industries form the fiscal foundation of the state, the primary source of employment, foreign exchange and public investment, and in some cases the political basis of national cohesion.

For these countries, the transition is a restructuring of the economic system itself. This article examines that restructuring through the lens of political philosophy, applying John Rawls’s theory of justice as fairness alongside comparative perspectives from utilitarianism and Amartya Sen’s capabilities approach, to ask what a genuinely just transition would require of the institutions that govern it.

Justice as Fairness applied to Transition

John Rawls, in A Theory of Justice (1971), proposed that principles governing social institutions should be designed from an ‘original position’ behind a ‘veil of ignorance’ – a condition in which decision-makers do not know their own social position, income, occupation, nationality or generation. The purpose of this thought experiment is to identify principles that no one could reasonably reject, because no one knows in advance whether they will bear the costs or receive the benefits of the arrangements being designed.

The veil reveals that the institutional rules shaping who bears costs and who captures gains are the product of deliberate design choices, and can be deliberately redesigned.

Rawls’s first principle of justice requires equalbasic liberties and fair equality of opportunity. A community adjacent to a critical mineral operation with no meaningful input into the licensing conditions governing that operation, the environmental standards applied to it, or the infrastructure commitments attached to its closure, occupies the position of a recipient of decisions made elsewhere. Participation in transition governance, under a Rawlsian standard, is a condition of legitimacy for the institutions that govern it.

The Difference Principle and the Distribution of Transition Gains

Rawls’s second and more demanding principle holds that social and economic inequalities are acceptable only if they improve the position of the least advantaged members of society. It operates at the level of institutional design: the basic rules governing how gains are generated and allocated must be structured so that those with the weakest economic and social position benefit from the arrangement.

The energy transition produces inequalities in a specific and largely unexamined way. Its gains are diffuse and broadly distributed: lower emissions, improved air quality, long-term climate stabilization, new industrial sectors. Its costs concentrate in identifiable places and among identifiable groups such as workers in carbon-intensive industries facing redundancy, regions whose economic base is built around extractive activity, states whose fiscal revenues are structurally tied to hydrocarbons or minerals. The geographic and social coincidence of transition costs with populations that are already among the least economically diversified and institutionally supported is a structural feature of how extractive economies are organized, and the difference principle applies to it directly.

The question it poses: are the least advantaged made better off by the arrangement in their actual material and social position? A transition that reduces global emissions while leaving fossil fuel-dependent regions without viable alternative economic pathways, or that accelerates demand for critical minerals while the institutional arrangements governing their extraction leave producing communities no better resourced than before, fails this test.

This has implications for how just transition policy is conceived. Social protection instruments such as compensation funds, reskilling programs, regional development grants, address the consequences of a distribution that has already been determined by prior institutional choices. The difference principle operates earlier, at the point where those choices are made. It asks whether fiscal instruments, licensing regimes, investment frameworks, and industrial strategies are designed with the interests of the least advantaged as a constitutive constraint. Institutions designed from the original position, without knowledge of whether one will emerge as a transition beneficiary or a transition casualty, would require that constraint to be built in from the outset.

The Intergenerational Dimension

The veil of ignorance, applied consistently, encompasses not knowing which generation one belongs to. Rawls recognized that just institutions must be fair to all generations, and the parties in the original position cannot assume they represent the present.

The transition is motivated in part by obligations to future generations. Climate stabilization is a benefit that accumulates over time and flows primarily to those who will inhabit the planet in coming decades. The intergenerational justice argument for decarbonization is well grounded in this logic and in Rawls’s own treatment of the just savings principle, which holds that each generation must preserve and transmit to those who follow a fair share of productive capital, human capital and the institutional foundations on which a just society depends.

The same principle, applied consistently, generates a parallel obligation. Decisions made now about how extractive activity is governed, how its revenues are deployed, and what institutional capacity it builds or erodes, shape the inheritance available to future generations in resource-producing states. A generation that extracts at scale and organizes fiscal arrangements so that rents flow entirely as current consumption, with nothing converted into productive capacity or institutional development for those who follow, transfers value from its own future citizens to itself.

The energy transition therefore carries two intergenerational obligations simultaneously. Stabilizing the climate is one and ensuring that each generation transmits a viable economic and institutional inheritance to those who follow is the other. Rawls’s framework gives neither priority over the other.

Beyond Rawls: Utilitarian and Capabilities Perspectives

Rawls is one framework among several, and the differences between approaches carry practical consequences.

A utilitarian perspective evaluates transition policy according to aggregate welfare outcomes seeking the greatest good for the greatest number. If rapid decarbonization avoids catastrophic climate damages and generates substantial economic gains across the global economy, these net benefits can justify significant localized disruption. Its limitation, in extractive contexts, is that aggregate welfare gains are fully compatible with severe and concentrated harm to specific communities and economies, when the numbers are large enough.

Amartya Sen’s capabilities approach adds a further dimension. Sen observed that formal access to opportunities like training programs, economic diversification funds, transition support, does not automatically translate into real freedoms and improved lives. A reskilling program offered to a 55-year-old underground miner with decades of physical strain, limited formal education and no economic alternatives in his region is formally an opportunity. Whether it functions as one depends on conversion factors the program itself cannot guarantee: health, geography, family obligations, the actual labor market conditions in the region. Sen’s framework directs attention toward whether transition support expands genuine human capability.

Together, these frameworks suggest that just transition policy needs to satisfy different criteria simultaneously: protecting the least advantaged, pursuing credible aggregate climate ambition, and ensuring that support measures translate into real improvements rather than administrative compliance. These criteria are not always compatible, and the tensions between them are where the hardest policy choices are made.

Concluding Remarks

Rawls supplies a criterion for evaluating whether a given institutional arrangement can be justified to those it disadvantages. Applied to the energy transition in resource-rich economies, that criterion is demanding.

An arrangement is just, in the Rawlsian sense, if the least advantaged such as displaced workers, host communities, fiscally dependent states, future generations, are made better off by it, with their actual material and social position as the measure.

The transition is not politically neutral because it reflects assumptions about whose interests matter, how burdens should be allocated, and what forms of development count as legitimate. Subjecting those assumptions to a Rawlsian raises the standard against which transition governance should be evaluated, and makes visible the distance between that standard and current practice.

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