The case for a first-ever EU just transition commissioner

The 'mission letters' for the new college of commissioners Ursula von der Leyen sends out on Wednesday (11 September) will tell us a lot about whether the promise of just transition translates into tangible action.

Building a society that enables people to thrive while also protecting the planet is possible. To get there, the costs and benefits of the green transition must be shared fairly. The wealthiest and the biggest polluters must pay their fair share, while workers should be protected and accompanied throughout the process.

As stated by EU Commission president Ursula von der Leyen last July when seeking the confidence of a majority in the newly elected European Parliament, “People and their jobs must always remain at the heart of our social market economy even as our industries and economies change shape. We need to ensure a just transition for all”.

This vision was also embraced in the strategic agenda adopted by the EU governments, where they committed to upholding the social dimension of the Union. But lofty words like “leaving no one behind” are not enough.

For the just transition to be real, we need a critical shift: climate, economic, industrial and financial policies must be designed to reduce, and never exacerbate, socio-economic inequality.

'Leaving no one behind'

The mission letters will be a key indicator of how serious the commission will be about the just transition. There are a number of ways forward that von der Leyen can take.

Firstly, a new European Commissioner focused on the just transition and climate action, with a clear mandate to ensure alignment of climate and social policies. Inequalities and poverty already exist in Europe, and we must ensure that climate and social policies go hand in hand to prevent the further exacerbation of social exclusion.

The mission letter for the just transition and climate should include a plan for a Just Transition Directive that ensures workers in carbon-intensive sectors, such as fossil fuels or automotive, are accompanied towards new good jobs. 

Secondly, there has to be a commitment to ambitious 2040 climate targets to protect the most vulnerable from climate impacts and extreme weather. The Social Climate Fund, and future financial frameworks, should ensure EU funds support people in the transition, including that vulnerable groups are not disproportionately burdened by climate policies. Lastly, public services need an uplift to guarantee that energy-efficient housing, low-carbon public transport and other sustainable options are affordable and accessible to all.

This is what “leaving no one behind” would look like in real life.

Von der Leyen has pledged to “significantly increase our funding for a just transition across the next long-term budget”. This is a fundamental commitment,  as without adequate financial resources, the green and just transition will remain wishful thinking.

However, a piece of the puzzle is missing as nowhere in the strategic agenda is a reference to redistributive taxation. 

Wealth inequality translates into huge carbon inequality, and those with the most wealth are responsible for the lion’s share of emissions. Progressive taxation — on extreme wealth and the fossil fuel industry’s excess profits — is a prerequisite to achieving the EU climate goals.

Reducing income and wealth inequality through progressive taxes is the simple way to curb excessive consumption by the wealthiest and their luxury emissions whilst generating public revenues to invest in the green and just transition. The ‘cost of living crisis’ makes it much more difficult for people to engage in the deep changes required by the green transformation, while the concentration of wealth and power in the hands of a wealthy minority is allowing them to disproportionately affect law-making to protect their profits instead of tackling the climate and environmental crisis. Therefore, taxing wealth would reduce not only economic but also political inequalities. 

Last but not least, despite the adoption of Next Generation EU (NGEU) when the Covid-19 pandemic started, large investment gaps remain for delivering on climate and other EU Green Deal targets as well as on the much-needed social investments to meet the Porto social targets.

These gaps notably entail crucial public infrastructure that cannot be financed through private capital and is needed for the private sector’s transition to a decarbonised, less material-intensive economic model. We need new taxation options to close the green spending gap and meet Europe’s international climate finance commitments. 

An ambitious EU climate and social agenda is incompatible with budget cuts. When Next Generation EU ends in 2026, the EU will need new sources of income. The EU fiscal rules already limit member states’ ability to invest at the national level. The solution lies in new taxation options — ensuring that those who pollute the most, and can afford to contribute more, do their fair share. 

Let’s see if the mission letters will live up to the promises made on just transition. There is no time to waste in leaving no one behind.