The ambitous plans of the European Commission on the European Green Deal are not least also raising social issues. In order to create a fair path towards a climate-neutral Europe by 2050, the Commission had published a proposal on setting up a Just Transition Fund already in January. The Chamber of Labour has scrutinized the proposal within the scope of its current Position Paper on the Green Deal.
At the end of 2019, the Commission had already stated in its communication on the European Green Deal that “the most vulnerable are the most exposed to the harmful effects of climate change and environmental degradation” and that the transition towards a climate-neutral Europe can only succeed “if it is just and inclusive”. However, in concrete terms, the Commission is also aiming at convincing those Member States, whose energy industry strongly depends on mining coal, of its plans regarding climate-neutrality. This concerns above all Poland where coal mining is still booming and where about 100,000 jobs – in particular in the poorer areas in the south of the country – depend on it. For this reason, the Commission presented its proposal on a Regulation for a Just Transition Fund on 14th January 2020.
The Just Transition Fund
The main purpose of the fund is to cushion in particular any negative consequences of the Green Deal for certain regions, professional and demographic groups. It shall contribute to “enabling regions and people to address the social, economic and environmental impacts of the transition towards a climate-neutral economy”. The fund shall support investments in employment and growth in all Member States. Apart from investments in small and medium-sized enterprises (SME), start-ups, research and innovation activities as well as digitalization processes, it has also been planned to provide affected areas with further training and retraining facilities for employees as well as with support for job seekers and their active integration.
Criticism of insufficient funding
The fund is a broader mechanism for a just transition, which shall be furnished with a total of 100 billion Euro. According to the Commission proposal, the fund shall be furnished with 7.5 billion Euro as part of the Multiannual Financial Framework (MFF) 2021-2027, whereby, if necessary, this amount could be increased. However, critics consider this amount to be too low to seriously meet future challenges of the climate crisis. Ludovic Voet, Confederal Secretary of European Trade Union Confederation (ETUC) criticises for example: “The funding proposed for 10 years is what would be needed every year to achieve climate neutrality by 2050 in a fair way“. According to Voet there was also a risk “that most of the funds being made available will go to research and innovation rather than directly benefiting affected worker”. The Chamber of Labour too comes to the conclusion that the funds provided for in the Commission’s current proposal will not be adequate.
Improvements urgently required
Besides the low funding, the assessment of the Chamber of Labour regarding the presented proposal is also rather differentiated. The fact that the proposal does not only consider the recovery of fossil fuels and the steel production, but also other value chains, affected by decarbonisation, is welcomed in principle. This could also give countries and regions access to the fund, which, for example, have not much mining, but instead boast a large automobile industry. The AK also welcomes the focus on small and medium-sized enterprises. However, there is criticism that the use of funds shall only be possible based on relatively inflexible one-year plans and that it is also only accessible to regions, which were determined in advance. This makes it impossible to react flexibly to crisis situations, which might occur within the scope of the transition towards a climate-neutral Europe. The AK therefore demands additional funding opportunities for unforeseen corporate crises, which result from the challenges of climate change. These shall be accessible at conditions, which are similar to the Globalisation Adjustment Fund. A possible alternative would be to expand the application area of the Globalisation Adjustment Fund as well as a significant increase of its resources.
The AK also sees a problem in the high co-financing rate through the European Regional Development Fund (ERDF) and the European Social Fund Plus (ESF+). The responsibilities of the EFS+ have been already massively increased for the next (budget) period – even though a budget reduction is on the cards. Hence, co-financing the Just Transition Fund through the ESF+ would therefore not be possible; it might also result in groups at risk – for example industrial workers and people at risk of poverty – to be played against each other, when financial support within the scope of the ESF+ is at stake. The AK therefore demands a significant increase of ESF+ resources.
No just transition without integrating the social partners
According to the IndustriAll European Trade Union, currently about eleven million people throughout Europe are working in coal-fired energy production, coal mining and energy-intensive industries. During a just transition towards a climate-neutral European Union, safeguarding the interests of workers must be given absolute priority. It must be ensured that these receive the best possbile support when tranferring to a new job. Hence, territorial plans should focus on avoiding job losses, whereby older workers must also be supported. Once unemployed, this group finds it especially difficult to get a new job. Apart from that, the transition must be accompanied by appropriate retraining and further training to ensure that the workers affected find new jobs in a decarbonised economy. And finally, it is also important to integrate the social partners in the entire process. If it wants to achieve a successful just transition, the EU cannot do without the expertise of labour representations.