Brief

An inclusive Social Climate Fund for the just transition

“Vulnerable citizens and families are more likely to have the least resources to face climate change, both financially, to move away from fossil-fuels, and politically, to have their voices heard in policymaking. The Social Climate Fund is an unprecedented opportunity to fill this financial and political gap.”

| 26/01/2022

The just transition will not be just if it is not inclusive. Currently, one in five Europeans are at risk of poverty or social exclusion. “To leave no one behind” implies taking extra care of the most vulnerable groups in the energy transition. Vulnerable citizens and families are more likely to have the least resources to face climate change, both financially, to move away from fossil-fuels, and politically, to have their voices heard in policymaking. The Social Climate Fund (SCF) proposed by the European Commission in July 2021 is an unprecedented opportunity to fill this financial and political gap. The SCF has the potential to support access to essential energy and mobility services for vulnerable citizens across the European Union (EU). It would serve as a complement to the Just Transition Mechanism that primarily is dedicated to mitigating social and employment impacts in coal dependent regions.

However, the current proposal offers insufficient guarantees for fulfilling expectations on social justice, decarbonisation, and more inclusive governance. Building on our previous brief on the Social Climate Fund that highlighted the need to decouple the SCF from the “ETS2” (the proposed Emissions Trading System on heating and road transportation), this brief outlines the key conditions to ensure that the SCF delivers a just transition. First, we present the main features of the Commission’s SCF proposal, and thereafter we turn to highlight why social acceptability should be the guiding principle of the SCF. This implies: (1) leaving enough room for social compensation targeted at the most vulnerable in the transition, which will be indispensable in some national contexts; (2) financing salient decarbonisation programmes targeted to the most vulnerable; and (3) implementing inclusive consultation, decision-making, and monitoring processes in the governance of the fund.

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Recommended citation:
Defard C. &  Thalberg K. 2022. “An inclusive Social Climate Fund for the just transition”, Policy brief, Jacques Delors Institute, January 2022.

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