The European Green Deal binds the European Union to becoming a climate-neutral territory by 2050. As part of this, the European Climate Law (June 2021) commits the EU to reducing greenhouse gas emissions by at least 55% (compared with 1990 levels) by 2030. To achieve this, a fundamental transformation of core production–consumption systems such as energy, mobility and food is necessary. Europe is in the process of rethinking and reshaping its development and economic policies, investing in research and technologies, and transforming Europeans’ understanding of progress and how to measure it. This will affect economies, societies, territories and people.
Eurofound and the European Environment Agency, in the foresight study The transition to a climate-neutral economy: Exploring the socioeconomic impacts, brought together EU-level and regional experts and stakeholders to explore what these socioeconomic impacts could be and how policy could respond.
Overcoming path dependencies, investing in skills and extending a safety net
It is a challenge to make a truly green transition happen, given the lock-ins and path dependencies that characterise production–consumption systems, compounded by the external and internal economic and social pressures that Europe faces. Ensuring broad civil society and social partner engagement is crucial, particularly in navigating conflicts and in deliberating over different pathways, and their potential costs and benefits. Furthermore, the sectors that will drive a green future, which currently are relatively small – such as organic farming and activities focused on the circular economy – need to be given a voice.
Decarbonisation and digitalisation will reshape the labour market. It is crucial to think about strategies for using this transformation to create more jobs than we lose, for instance in the circular economy and renewable energy. However, this shift to a climate-neutral economy will impose new requirements on people, and labour demand might not match labour supply. With this in mind, it is important to invest in education, skilling and reskilling and to provide the necessary support for job transitions. So too should we rethink our welfare strategies and programmes to ensure a safety net is in place for those at risk of being left behind.
We must not forget that the economic and social conditions of the decarbonised economy of 2030–2050 will be shaped by the decisions made today.
Responsible consumption and meeting basic needs for all
A true transition to climate neutrality demands policies that facilitate more responsible consumption patterns. For instance, the will to engage with more environmentally friendly means of transport (such as public transport, cycling and walking) is there, but barriers include a lack of infrastructure to facilitate this. In Romania and Greece, for instance, respondents to a Eurofound survey rated poor access to walking and cycling routes as the most problematic issue with their local area, while poor access to public transport was common throughout the Member States. Consumption of organic food could also be stepped up, if its price comes more into line with non-organic food and access to it improves.
To support people who are negatively affected during the transition, and those already in vulnerable situations, it is important to break the link between employment and fulfilment of basic needs. Currently, for instance, access to quality services often depends on income or employer-provided insurances. It is key to break this link to guarantee the right to ‘a life in dignity at all stages of life and effective access to enabling goods and services’, as set down in the European Pillar of Social Rights.
Reducing needs and increasing awareness of the benefits of going green
In addition to meeting needs, more has to be done to reduce needs. For instance, more effort should go into preventing the need for care by, for example, addressing obesity through improved diets and facilitating active modes of transport; or by reducing hospitalisations from excessive cold or heat through better housing insulation. Similarly, transport needs could be reduced by focusing policy interventions on making sure people can get where they need to go, by looking at why and how people travel. Both digitalisation (facilitating telework, e-healthcare and e-government services) and good quality homes with good access to services and work can enhance quality of life and reduce demand for transport. Furthermore, besides contributing to mitigating the impact of climate change, these measures also prevent other forms of environmental degradation.
Politically, however, meeting needs is often more appealing than preventing needs from arising in the first place. The European Green Deal is a huge test for policymakers in this respect, as there is so much more to gain from pre-empting problems than from addressing them once they occur. To make the transition to climate neutrality happen, policymakers should seek public support for prevention by, for example, raising awareness of the non-economic benefits of the transition. These include improvements in human health resulting from cleaner air, healthier diets and reduced urban heating, and a better quality of life overall.
Such improvements will likely benefit low-income groups more, who tend to be more severely affected by the impact of environmental problems – for instance, they often live in more polluted areas and are more likely to have underlying medical issues that make them more vulnerable to the health effects of pollution. Reducing households’ dependence on external energy (by upgrading insulation and installing solar panels) and improving access to active modes of transport also reduces their energy and transport bills, and enhances their resilience against energy and fuel price increase.
Europe faces many challenges on the road to climate neutrality. Broad civil society involvement, which includes the most vulnerable and those most affected by the transition, is crucial for getting there. Mechanisms for such engagement are discussed in the recent Eurofound report The transition to a climate-neutral economy: Exploring the socioeconomic impacts. Policymakers need to facilitate responsible consumption, while ensuring the needs of all people are met, with greater emphasis on measures that simultaneously reduce these needs and benefit the environment.
Image © EdNurg/Adobe Stock
Footnotes