Energy & Environment
The EU budget can support a just transition, but not as it stands
Lea Pilsner and Pieter de Pous / Nov 2018
The EU has about 10 years left to put itself on a steep decarbonisation pathway to reach a net zero emissions goal by 2050. How it spends the €1.279 trillion of Multi-Annual Financial Framework (MFF) budget during this period will largely determine whether it succeeds or fails. Budget spending will also determine how effectively the EU will manage the impacts of the clean energy shift on its regions, communities, and workers.
The existing €1.3 trillion in EU budget funds can already deliver the “just transition”, i.e. ensure the transition to a net zero emissions economy is socially fair. Just not with the currently proposed rules. Targeted measures in each key European fund are needed to make sure affected regions can tap into Europe’s existing budget to guarantee a socially fair transition to a fully decarbonized economy.
The recent Intergovernmental Panel on Climate Change (IPCC) 1.5 degree report again spelled out the price we will be paying if we fail to put a check on the climate chaos that comes with failing to keep the increase in global average temperature under 1.5 degrees. The EU, as both the world’s largest consumer market and a community of law, home to a trained and skilled workforce, is well placed to make a successful transition to a net zero economy. It will however require the EU to mobilise all its resources in support of this transition process to ensure it is both socially just and ecologically effective.
Investing in such a just transition for workers and regions dependent on carbon-intensive industries would ensure they are given a fair chance in the booming, and highly competitive, clean tech sector. Our recent report, Funding the Just Transition to a net zero economy in Europe, found ambitious amendments to the Commission’s proposal now need to be agreed upon by EU Member States and the European Parliament for the next EU budget to deliver this.
In particular, our assessment of five key funds– Cohesion Policy Funds, European Social Fund Plus, InvestEU, Horizon Europe and the European Globalisation Adjustment Fund – show there is a clear lack of strategy to support a just transition across the budget. Measures on just transition exist but they are piecemeal and do not take advantage of the EU budget’s cross-sectoral nature to embed just transition across policies. This is a missed opportunity because the just transition is not only about punctual social measures but an opportunity for locally-led economic and industrial development, for investments in innovation and clean technology as well as for long-term reskilling in affected regions.
The EU budget, with its various funds, is uniquely placed to cover all these areas provided policymakers take the necessary steps. Far from a complete overhaul, this would only take tailoring existing funds to make sure they can offer social and economic opportunities for the regions moving away from unsustainable high-carbon dependency. That means promoting green development models that spring out of local – as opposed to national – needs and ensuring opportunities created by the transition reliably reach workers and are accessible by cities and local actors who best know the local needs.
The European Parliament is about to finalise its position on a number of files and the Council is in progress as well, but both still have the opportunity to make sure the budget delivers on the just transition.
Timing is everything. This summer already gave a sneak preview of the damages and losses that await us if we fail. The economic and human cost will only escalate in the coming years. Ensuring early decisive action to get out of fossil fuels and investing the money available today into a managed just transition will give the EU a fighting chance to minimize climate chaos and emerge as a global leader in a low carbon economy.