Together with the rest of the world, European countries are scrambling to reduce their dependence on fossil fuels. This global energy transition will have an enormous impact on how we produce and consume energy - and thus on the people who are currently working in sectors that will be affected by the transition.
To sidestep the potential negative fallout from the switch to clean energy, such as job losses and higher living costs, and avoid a widespread public backlash against necessary climate policies, the EU and member states must plan carefully and ensure that the transition will be
just. The Union has already taken some steps in that direction, but historical examples give us cautionary tales, as well as lessons that can be learned from good practices. To achieve both ‘distributional justice’ – making sure the energy transition guarantees an outcome that is just for workers – and ‘procedural justice’ – governments taking on input from citizens and stakeholders – more efforts are required in three areas:
1. Help industry to reorient to minimise job losses. The EU should remove all subsidies for fossil fuels and ambitiously reform the Energy Taxation Directive (ETD) to allow for member states to lower electricity taxation.
2. Define and track how the energy transition is changing jobs and skills, and incentivise and support workers to retrain. An EU-wide definition of employment and skills for the green transition would also ease the matching of changing skills with employment and allow the regional effects of the transition to be assessed.
3. Reach out to citizens and get them on board with the transition:
a) To achieve distributional justice, the EU should as much as possible mitigate the redistributive effects and costs of climate policies. EU fiscal rules should be reformed to give member states enough financial breathing room to compensate for the social costs of the energy transition through robust social baseline systems. Existing and future funding mechanisms – the Recovery and Resilience Fund (RRF), the European Pillar of Social Rights (EPSR) and the Social Climate Fund – should prioritise social justice.
b) To achieve procedural justice, the EU should guarantee input from citizens and stakeholders in how the energy transition is implemented. Just transition commissions at the national level can help to improve cooperation and ease the switch.
Although the ongoing energy transition is affected by market forces, it is less circumstantial than past energy transitions. Because it is driven by predictable policies to reduce emissions and achieve climate neutrality, better planning and coordination is possible. It is now up to the EU and its member states to learn the lessons from the past and achieve a transition that is fair and inclusive for all.
Read the full paper here.