Lack of ambition and solidarity from Member States risks derailing the potential of the Social Climate Fund to deliver transformative change and a just transition for all
Mikael Leyi is the general secretary of SOLIDAR
The Social Climate Fund (SCF or Fund), which the European Commission (EC) proposed as part of its Fit for 55 package in July 2021, has the potential to be one of the main instruments to ensure a transition socially equitable and just towards the climate. neutrality.
The Fund can help usher in bold and transformative action at all levels of society for systemic change to build a sustainable and secure future for all, especially those on the margins and in vulnerable situations.
However, without certain policy reforms and safeguards, there is a strong risk that the SCF will fail in this regard from the outset. The EC proposal foresees an insufficient budget, a lack of shared governance and a less than ideal organisation. Moreover, some Member States are opposed to the idea of creating an SCF in the first place.
Together with some of our partner organizations and a dozen other members of the European Alliance for Just Transition, SOLIDAR has developed a set of recommendations for policy makers. Overall, we call on the institutions of the European Union (EU) and Member States to be both more ambitious and united. Full joint statementincluding the list of signatories, is available via this link.
The SCF must be a transformative instrument to fight against structural injustices
The SCF should not be solely remedial and target only the new injustices created by the extension of the emissions trading system (ETS) to road transport and buildings. Its main objectives should be to meet structural injustices, such as energy and mobility poverty, that exist independently of climate policies, and drive socially equitable decarbonization in mobility and buildings long-term. Investment programs should root causes of injustice, such as our dependence on fossil fuels, and be used for measures such as deep renovation projects, stimulating renewable energy for the benefit of households, sustainable mobility or improving energy efficiency and sufficiency . There must be no room for investment in fossil fuels in the CFS.
SCF should target underrepresented groups and people in vulnerable situations, while ensuring meaningful stakeholder participation
Low-income households and those in vulnerable situations are the most impacted by climate change, while being those who contribute the least to it. At the same time, vulnerable groups face particular barriers to investment and are often excluded from general and untargeted investment measures and investment-related decision-making. So, the target group of the SCF it must be people living in a situation of vulnerabilitysuch as people who are unemployed, on low income or in a situation of fuel poverty and mobility, and those who have been systematically disadvantagedsuch as rural and racialized communities.
The development of Social Climate Plans and the eventual implementation and monitoring of the Fund must guarantee bottom-up governance, cross-sector collaboration and meaningful stakeholder engagement. Social dialogue and meaningful participation requirements must become mandatory criteria for access to funding, and civil society organisations, especially those representing people living in the most vulnerable situations, trade unions, young people and local constituencies and governments must be involved in determining the how SCF revenues are spent.
The SCF must engage and empower people in vulnerable situations towards renewable energy and better energy efficiency
The SCF needs to focus more on proactive solutions to help vulnerable households break the cycle of energy poverty and mobility. Financial interventions may include actions such as supporting vulnerable households to renovate their homes and become owners of local photovoltaic, solar thermal or other renewable energy installations at an affordable price. This could help break the cycle of energy poverty for many households, promote social acceptance of the energy transition, accelerate the achievement of renewable energy targets, sustainably relieve public budgets and increase the energy autonomy of the country. EU, Member States and local communities. Local authorities and energy communities could coordinate and implement these support programs more effectively.
As energy prices remain high, there is a risk that the misleading narrative will persist that energy efficiency measures and renewable energy deployment are the cause and driver of this development, rather than the solution. Thus, in addition to financial interventions to support vulnerable groups, the SCF must to raise awareness on synergies between renewable energies, energy efficiency and social objectives, in line with the social ambitions of the European Green Deal.
A large and impactful SCF is essential for a socially equitable Fit for 55 package
Households face a energy price crisis. This crisis is not driven by a carbon price, but by fossil fuels whose prices are volatile. To protect European consumers from future fossil fuel price crises, we must accelerating the transition to renewable energy through a wide range of policy measures, including strong social support. Existing structural inequalities mean that redistribution between households is essential both within and between Member States, even in the absence of an extension of emissions trading to road transport and buildings. At the same time, the scale of the investment challenge to address these inequalities and tackle climate change is enormous.
If part of the ETS 1 revenue can be redistributed via the SCF, sources of income other that ETS 1 and 2 must enter the SCF and they must be permanent. Various assessments of annual needs for public and global investment in housing and transport suggest that the planned envelope of 72.2 billion euros for 8 years falls far short of a significant contribution to the social and climate objectives of the pact. European green (sources here and here). Last but not least, ETS revenues from buildings and road transport must not be used to repay EU debtas this would not be in line with the spirit of the SCF as an instrument to achieve a just transition for all.