06 June 2022

LSE: A social approach to climate change: Explaining the adoption of the Just Transition Fund

The EU has established a Just Transition Fund to help support regions and sectors that face socio-economic challenges during the transition to climate neutrality. Anna Kyriazi and Joan Miró explain how the ... its role in highlighting the social policy implications of pursuing a green transition.

Climate change poses the greatest existential threat to organised human existence. Tackling it requires urgent and wide-ranging social and political change. However, deep decarbonisation can only be viable and legitimate if it is socially fair. In other words, it cannot (only) constitute an additional burden for workers, households, and consumers, but rather it should be an opportunity to generate shared and inclusive prosperity.

In 2019 the European Commission launched the European Green Deal, envisaging nearly 50 initiatives to ensure the green transition. Acknowledging that efforts to tackle climate change need to be socially legitimate, the Green Deal aims to assuage some of the painful social consequences of the transition by creating a Just Transition Fund (JTF) and a Social Climate Fund. While the first will channel €17.5 billion to the regions and sectors most affected by decarbonisation, the second, still in its first legislative steps and with a proposed €72.2 billion capacity, aims to tame the detrimental distributional effects of the new EU Emissions Trading Scheme. Both instruments will be operative until 2027.

As we argue in a new study, the Just Transition Fund is an intriguing innovation that highlights the limits and possibilities of the current politics of climate change. Adding a social dimension to the energy transition is not a given and history provides examples of environmentally beneficial but socially regressive transitions. Indeed, when in 2018 the EU set its climate objectives for 2030, little consideration was given to social policy implications. At the same time, redistributive instruments are rarely adopted in the EU due to their politically charged character. How, then, did the Just Transition Fund come to be?

Agenda-setting

No social condition, however important or severe, automatically becomes a political problem without being constructed as such by actors pursuing certain interests and goals. Additionally, the issue of climate change is especially hard to recognise as an urgent political problem because of its slow and cumulative character and therefore it is likely to generate policy procrastination.

Despite this, a major change occurred in 2018-19, driven mainly by the persistent and massive mobilisation of civil society actors. Three social movements stand out in particular: Extinction Rebellion, the Yellow Vests in France, and the youth movement Fridays for Future. The three movements, very different in their social bases, claims and actions, highlighted different aspects of the climate challenge emergency, but their joint effect was to call unprecedented attention to it.

At the time, European publics were also increasingly turning their attention to climate related issues as well as becoming more supportive of the EU taking the lead in solving such problems. It is also worth remembering that 2019 was the year of the European Parliament elections, when Green parties increased their vote share compared to 2014. The incoming Commission led by Ursula von der Leyen was seeking a new political programme and legitimating narrative, which it found in the ambitious project of the Green New Deal.

The first explicit demand for a fund to assuage some of the painful consequences of the energy transition came in 2018 from a highly influential conservative Polish politician, Jerzy Buzek. The idea was for this fund to focus on coal regions and thus to be a targeted measure for Eastern and Central European states which are more reliant on coal and tend to have weaker economies than other member states. During 2019, the proposal reappeared in discussions regarding the EU’s long-term climate objectives, as Eastern European actors demanded financial assistance to be able to implement these objectives. In this context, the potential for a trade-off arose: climate laggards would sign off on the objectives in exchange for compensation funds.

Nevertheless, the June 2019 European Council failed to agree on a landmark climate strategy for 2050, as the leaders of the Czech Republic, Estonia, Hungary, Poland, and Romania continued to oppose it, demanding detailed pledges for funds for the countries undergoing the transition. Other member states, such as Spain, which had already undertaken substantial energy transitions in the preceding years, were wary about the idea of paying others for their decarbonisation when they had received no such support beforehand.

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