70 billion euros are available for distribution

IF – 12/2022

The Social Climate Fund is intended to be the EU's financial response to protecting its citizens from the effects arising from climate change (see DSV-News 3/2022). The entire EU has been hit by the full force of the energy crisis. The European Parliament already voted overwhelmingly in favour of the Social Climate Fund back in the summer and it is a multi-billion euro fund negotiated jointly by Members of Parliament David Casa (EPP/MLT) and Esther de Lange (EPP/NL).

Climate and social issues in double pack

The need to make the transition to carbon neutrality socially just as well is at the heart of the political discussion. The Social Climate Fund, which is part of the Fit for 55 package, was chosen to be the financial cushion for any social and employment effects caused by climate change. The Fit for 55 package is a series of legislative initiatives launched by the European Commission under President Ursula von der Leyen. The EU is aiming to reduce CO2 emissions by 55 per cent by 2030.

Casa will now lead the negotiations with the EU governments represented in the EU council alongside de Lange and on behalf of the European Parliament. The first official trialogue negotiations were held in Brussels on 16 December.

Joint way out of the crisis

More than 70 billion euros are to be invested in energy-efficiency measures for households and small businesses. The objective of this policy is to realise a long-term reduction in energy demands and consumption in European households. Lower energy consumption could help to reduce emissions and ensure savings for citizens as well as businesses.

Citizens from all income levels are now feeling the rising energy prices and political solutions must be quickly implemented so that these price increases in the energy sector can be stopped. Many people are foregoing previous investments in their daily needs, leisure or holidays in order to cope with the financial pressure being caused by the high energy prices. These spending restrictions will have a negative impact on the circular economy within the EU.

Implementing the fund

Funding for social and climate investments should initially be provided by the member states and supported by an increase in funding from the EU as well. The rapporteurs want EU governments to take immediate action to fund investments for citizens and support the energy costs through direct income support. But the EU's green plan must first be felt in people's daily lives.