The Just Transition Mechanism is a European Union’s policy framework, a part of the Green Deal, designed to mitigate the worst socio-economic effects of the transition into a climate neutral economy, which can prove difficult for regions highly dependent on carbon-intensive industries.
The Just Transition Mechanism aims to invest in renewable energy sources, create new jobs in the green economy, provide technical assistance, ad improve infrastructure. But is this initiative successful, and how does it affect the workers in the end?
Tools
EU plans to mobilize 55 billion over the period of 2021. The three main financing pillars are:
- The Just Transition Fund, of €19.7 billion in current prices, which is expected to mobilise around €7.3 billion of national co-financing, amounting to a total of €27 billion.
- InvestEU « Just Transition » scheme , which will provide a budgetary guarantee under the InvestEU programme across the four policy windows and an InvestEU Advisory Hub that will act as a central entry point for advisory support requests. It is expected to mobilise €10-15 billion in mostly private sector investments.
- A new Public Sector Loan Facility, that will combine €1.3 billion of grants financed from the EU budget with €6-8 billion of loans from the European Investment Bank, to mobilize €13.3-15.3 billion of public investment.
Challenges
Despite the necessary function of the Just Transition Mechanism, it has been criticized. It is argued that it seems to benefit policymakers and existing industries more than real social change. It is also said that resources are not enough to achieve the objectives and the process is not sufficiently transparent and participatory. As it is mainly aimed at supporting coal-based regions to reduce the impact of decarbonization, it still represents a small percentage of the people affected by it. Sectors such as automotive and other energy-intensive industries are not included. It is estimated that around half a million jobs will be lost in the automotive sector.
The way forward
Special emphasis should be placed on education and the cultivation of new skills around green growth and renewable energy. Training, retraining and upskilling should therefore be flexible, targeting all workers according to the needs of the community and the nature of their work, ensuring that no one is left behind.
Citizens’ Climate Assemblies in France and other European countries are becoming increasingly popular as a forum for public debate on climate change. Transparency, information and capacity building are essential to promote the participation of particularly vulnerable groups affected, but also to take into account at the moment of decision-making, thus reaching a satisfactory level of ‘environmental democracy’.
The focus should be on how Member States with different capacities and economies can cope. As it is not a legally binding mechanism, and is mainly based on political will, it is felt that social policies in particular should be strengthened through clear guidelines and legislation. In general, it is proposed to broaden the scope of the financial instruments to cover other areas and to encourage the creation of a legislative framework to ensure real public and citizen participation. After all, the mechanism’s greatest principle is the ‘no one is left behind’.
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