On 16 September 2020, the EU Parliament backed financing gas investments via the just transition fund. This is one of a series of signals (including multiple budget revisions) that demonstrate that the just transition platform is not only focused uniquely on fossil fuel regions, but also could lead to funding the ongoing activities of fossil fuel industries. Green jobs? Green economies? Green growth? Will this really bring about the changes that the EU claims? We argue ‘no’, not in its current iteration, and a different path is urgently needed, in line with its original intentions to propel the EU into a low carbon future. We build on insights provided by 60 expert interviews in our NWO funded project ‘managing a just transition out of Covid-19: A Dutch-UK comparison’.
On 16 September, Commission President Ursula Von de Leyen announced an increase in the EU’s carbon emission targets to 55% by 2030. If we are serious in achieving this, we should firstly believe in communities, not cash rich fossil fuel companies. We need to, secondly, back new low carbon technologies, not find yet new ways of subsidizing old dirty fuels. There is still time for the EU to change its path.
The EUs Green Deal risks putting money into the hands of polluters
The EU is the first multi-nation region in the world to commit to decarbonising through its Energy Roadmap 2050. The 2020 European Green Deal seeks to position the EU as a global leader in this transition through a set of targeted policy initiatives including a new climate law, embracing circular economy, renovating buildings, pollution reduction, ecosystem management, sustainable agriculture, transport, financing, research and a carbon border tax.
The Green Deal is therefore the EU’s key strategy to decarbonise economize, pledging at least €1 trillion to sustainable investments and (at time of writing) €7.5 billion to a Just Transition Mechanism (JTM). Rather than empowering citizens themselves to drive the change, the JTM which claims to ensure “no one is left behind”, will be accessible by projects that include fossil fuel companies who have been sluggish in phasing out coal and gas, putting money directly into polluters’ hands.
A flawed structure in need of urgent reform – The EU Just Transition Platform
Intentions are clear in their stated ambitions for achieving regional targets that are beyond any other. Whilst other commentaries are available on the impact of watering down an original €100 billion agreed in January to the current €7.5 billion, we argue that the structure of the existing just transition platform and associated mechanism could lead to the unintended consequence of a slower transition to a low carbon future, and even the further reinforcement of the status quo.
This recent amendment to the just transition fund bill by the European Parliament signifies an inherent problem. The funds are targeted towards fossil fuel polluting regions and workers in associated industries. This is surely a flawed approach. We argue that we should fund technologies and community initiatives, rather than specific regions or fossil fuel industries. This would also ensure that the money does not end up in the usual hands, with all too familiar consequences.
The rather complex tripartite funding structure of the just transition platform – the Just Transition Fund, InvestEU and the EIB public sector loan facility – needs more cross-regional integration before deployment. So called Territorial Just Transition Plans, uniquely focused in carbon intensive regions, are simply insufficient mechanisms for achieving a cohesive European approach to decarbonization. Communities should not be ‘engaged’ in the implementation of plans, but rather empowered to own the process. Technological choices should not be free. They should be stipulated. Fossil free.
Covid-19 represents a ‘critical juncture’ for the EU’s Green Deal – and its not only about money
So much time on the EU Green Deal has been spent on debating financing. This is important. But it should not overshadow the importance of maintaining core principles, facing up to old and new realities and developing concrete ways of achieving intended goals.
The 2020’s will be pivotal. The global pandemic is grippling European economies. The EU must now more than ever muse deeply on its investments. The world is not on track to keep temperature rise below 2°C and the Green Deal’s business as usual approach accepts this. Covid-19 has lifted the veil on the fragility of the current economic system which has left us with a climate breakdown and widespread social injustice. But the strength and unity of people has shown through. In their resilience, communities have proved they are capable drastic overnight change.
Humanity needs a Green Deal which supports a fundamental restructuring of the economy and a decarbonisation that is driven by people. Covid-19 is a once in a life-time opportunity to imagine and build forward (not back) to a better world by simultaneously tackling climate action and social injustice.
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This blogpost is written by a research team at ESSB examining the impact of the COVID crisis on the delivery of a just energy transition, in the Netherlands and in the UK. This team consists of:
Prof. dr. Darren McCauley, Chair in the Management of International Social Challenges (MISoC) at Erasmus University Rotterdam and head of the Global Social Challenges pillar of the Erasmus School of Social and Behavioural Science.
Iain Todd, Post-Doc Researcher at EUR, having gained his PhD on the energy transition in South Africa from the University of St Andrews.
Mary-Kate Burns, Research Assistant at the EUR, and holds a BA in Politics, Philosophy and Economics and a MSc in Sustainability Science and Policy.
Cas Bulder, a recent graduate from the Governance and Management in the Public Sector Master at Erasmus University.