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8 February 2019

Just transition – not just another transition

climate change

Almost 10 years ago, the successor to the international Commission on the Measurement of Economic Performance and Social Progress, known for its report, Mismeasuring Our Lives: Why GDP Doesn’t Add Up, published a follow-up, Beyond GDP: Measuring What Counts for Economic and Social Performance, in which the authors put more emphasis on inequality and sustainability. For more than twenty years this has also been at the core of trade unions’ demands for the transition to an environmentally sustainable economy.

At a well-attended event in early February organised by the ETUI, the issue of Just transition was further developed and discussed on the basis of four recent research reports looking from different angles at the problem of managing a transition to an environmentally sustainable economy.

ETUI’s General director Philippe Pochet said in his opening remarks that a lot of work still needs to be done to change the prevailing economic model, taking into account the social aspects of the transition and the fact that it is a collective challenge requiring that actors work together collectively. The ETUI is planning a big conference on this topic to take place in September, but in the meantime the seminar would start the ball rolling in helping us explore links between research and policy.

Gustav Fredriksson, presented the main messages from the Bruegel publication The distributional effects of climate policies, which he co-authored. “The aim of the study was to identify what we know and what we don’t know and try to fill in the knowledge gaps”, he said. Considering that the distributional effects of climate policies can be large and complex, key climate policy tools such as carbon taxes for different fuels, certain mandatory standards, subsidies and regulatory tools, can make low-income households disproportionately worse off. On the other hand, inaction might increase inequality even more. In order to be able to develop climate policies that minimize adverse distributional effects, more data and research is needed and policy-makers should factor distributional aspects more prominently into their policy choices and compensate low-income households. This would increase public acceptance of climate policies.

Marcel Mersch, coordinator of the S&Ds Progressive Society, started his presentation of the  Report of the Independent Commission for Sustainable Equality by saying that, as there was no movement at the European Commission on this issue, the S&D Group in the European Parliament had been trying to develop a new way to restructure their work in the Parliament using sustainable development as a guide because, as he put it, “social and ecological dynamics are feeding into political crises”. Their concept of “sustainable equality” goes beyond “just transition”, as it is about the “wellbeing for everyone in a sustainable Europe”.  

The new political vision, rooted in sustainable development and aimed at combatting the growing inequalities in Europe, contains five broad and joint headline goals: power to the people, trade unions and civil society; reshaping capitalism; social justice for all; social-ecological progress; and enabling change. According to Mersch “the only way to address climate change is to make our societies equal and to undergo a systemic change of the economic system”. In this respect, the next Commission may come to be seen as the Commission with the last chance to profoundly reform the outdated policy frames and processes, and particularly the European semester and its indicators.

In the second part of the event, ETUI senior researcher Béla Galgóczi presented his ILO Actrav Policy Brief, Just Transition towards an Environmentally Sustainable Economies and Societies for All. In his view only through a restructuring of the entire economic, production and consumption model can we make the fundamental revision of the previous – energy and resource depleting - growth model become reality. “But even if it is clear that the clock is ticking, climate policy and just transition are not at the centre of the EU policy debate”, he cautioned. Just transition should be seen as “just burden sharing” with different dimensions going from climate and environmental justice to managing job transitions and job quality and equity in the zero-carbon world.  He also insisted that the interrelation of inequality and climate change policies can be substantially different depending on the concrete composition of the country or region, for example in South Africa there is already entrenched inequality in society. A lot depends on the actors too, and in this respect “trade unions need to reinvent themselves and build new blue-green alliances”.

In her presentation, Montserrat Mir, ETUC Confederal Secretary talked about the trade union guide Involving Trade Unions in climate action to build a just transition, published by the ETUC last year. She said that at the beginning of the project there was a low level of interest in and participation from the members, but now “our members are mobilizing for climate change”, she said. “Our job was to tell them that they could be part of the solution, we need workers’ participation in order the transition to succeed”.  But for this to happen they need to be prepared and reskilled, and the labour market needs to be reshaped, offering quality jobs. Otherwise “our members won’t be on board if they see that there is no alternative”.

Bas Eickhout, member of the European Parliament and one of the two Spitzenkandidaten from the European Greens, expressed his satisfaction that, finally, just transition was being talked about by policy makers. But he warned that “if we don’t get just transition right, the entire edifice of support will cripple”. A big challenge is not to lose public support for the transition, and this could be achieved by ensuring that it is a socially just transition. In this respect it is very important to include climate policies in trade and taxation policies, otherwise countries will continue to compete for businesses, and democratic power will be given away to companies. The idea of establishing a European fund for just transition “won’t fix the problem - that is not what we want to achieve when we talk about just transition, the debate needs to get much more fundamental”, he concluded.

Benjamin Denis, sustainable development advisor at the ETUC, said that the ETUC believes that it is, nevertheless, also important to have a development fund because we know which sectors are impacted and we need a fund to deal with the urgent social consequences of decarbonization policies. In Bulgaria, for example, in a specific region, there will be 5000 job losses as result of the closing of coal based industry, and as there is “lack of visible action to deal with this, a fund might contribute to bridge the gap”, according to him.

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