The Social Cimate Fund: A drop in the bucket of the Green Deal

anonymous person pouring liquid product on table with pipette

Last week, the European Parliament adopted the European Social Fund with the ambition of “leaving no one behind”. This week, Member States are discussing it with some countries reluctant to increase it. But is the Social Fund enough to really leave no one behind in the fight against Climate change ? The response is clearly no. Since the presentation of this plan, we have assessed all the impact assessments presented by the European Commission related to the impact of the Green Deal on the “unavoidable expenditures” for European families: food, housing, transport & energy. We took the most optimistic scenarios, including an unrealistic 20% growth over the next decade. We excluded the impact of the war in Ukraine. But still, the results are clear: a Social Climate Fund at least 10 times bigger is needed in addition to a permanent integration of the most cost effective solutions. The new economic conditions make this need even more pressing. A “champagne” or elite only approach toward the transitions would lead to an economic and political deadlock, therefore also to an environmental impasse and no Green Deal at all. The full study can be read here.

Inequality and the destabilisation of social balances are a major threat to the European Union’s ability to successfully implement its Green Deal strategy. In order to meet this challenge and to carry out this transformation project, it is necessary to measure as precisely as possible the extent of the concrete impacts of the changes envisaged in everyday life. This analysis must inform the choices made to ensure that the Green Deal is a good deal for all.

Since the presentation of the major piece of regulations by the European Commission related to the Green Deal, we have assessed the impact assessment from the Commission itself, always taking the most optimistic scenarios. This research has shown that the cost of the technological alternatives chosen for a low-carbon Europe must be a constant concern for decision-makers to avoid leading the Green Deal into a dead end.

At this stage, an assessment of the choices underlying the main strategies presented by the European Commission shows that both the Fit for 55 package and the Farm to Fork strategy do not sufficiently integrate this issue and should be reviewed in the light of the social and inequality dimensions. Indeed, it is important to bear in mind that in the best case scenario (i.e. if growth continues), the poorest households in Poland will spend 100% of the new resources available to finance the Green Deal over the next ten years. In a very high potential growth scenario, 70% of their budget would remain a binding expenditure. For a large part of the population in Europe, and in particular in France, the share of constrained expenditure would increase considerably, at least by more than 10 points compared to the current situation, which raises questions about the degree of acceptability of the choices envisaged at this stage and their capacity to take society as a whole.

In two of the three cases studied, the additional annual costs would represent one time the French minimum wage (1600 euros), and twice the Polish one (1240 euros). In Spain the slightly lower annual costs (740 euros) are attributable to expected strong growth, as well as a series of favourable factors. In order to achieve the ambition of the Green Deal, which is currently supported by a large majority of citizens, and to maintain the level of support, the European Union must carry out a socially acceptable transition, i.e. one that is fair and therefore accessible to the greatest number of people. This transition must not only take place over a credible timeframe to allow for adaptations and investments, but must also be anchored in the reality of the economic principles of the proposed solutions.

At this stage, it appears that the technologies or options envisaged are elitist and do not correspond to the reality of a consumption structure within the reach of the greatest number, threatening the very success of the Green Deal or even its ability to become a reality, even though the scale of the climate challenge requires a successful trajectory for the Green Deal. The Social Climate Funds is certainly important be far from being the magic wand.

girl in yellow safety vest holding yellow helmet while standing on wooden pier beside yellow boats
Photo by Pavel Danilyuk on

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