A Just green transition? Limits and prospects of the European Green Deal

The war in Iran and surging fuel prices, summer heatwaves, cloudbursts, and wildfires. Global and national current events have brought the environmental issue back to the forefront, and along with it, the European Green Deal — the grand blueprint designed to tackle the climate crisis. But what about its social dimension? To what extent has it been implemented so far? And how could it be strengthened? Tracing the path from the inception of this measure to its potential avenues for improvement, let us examine what the European Union could do.

Leaving no one behind

The European Green Deal was launched in 2019 with the ambition of combating the climate crisis through an all-encompassing green transition. Within it, however, the European Commission embedded a fundamental premise: the green transition must be socially just, meaning it must not generate social inequalities or exacerbate existing ones.

The notion of a “just transition” did not emerge out of thin air: its roots lie in the demands of American trade unions in the 1990s, and it was enshrined globally within the United Nations 2030 Agenda through the guiding principle of “Leave no one behind“. This principle establishes a clear ethical imperative: measures aimed at mitigating the adverse socioeconomic impacts of environmental policies must prioritize the most vulnerable segments of the population, who are hit hardest by the green transition. The European Union adopted this stance, making it a cornerstone of the Green Deal and establishing the indivisibility of environmental and social policies — in what the literature terms “eco-social integration“.

To understand this link, consider a concrete example: under the Green Deal, the European Commission mandates the closure of coal plants due to their high emission levels, yet this risks triggering mass unemployment among workers in the sector. To prevent this, the just transition is implemented under the “Leave no one behind” principle: Green Deal financial support is allocated primarily to the most vulnerable individuals who would struggle to navigate such major disruption — such as older workers who are difficult to retrain, or single-income families. In this manner, environmental protection and the social protection of workers across affected regions are inextricably linked, designing green initiatives from the outset in synergy with targeted social policies.

Implementation instruments of the just transition and the welfare deficit

To give substance to this commitment, the architecture of the Green Deal introduced several operational instruments that nevertheless present two structural vulnerabilities.

On the one hand, the financial mechanisms are distinctly selective: the Just Transition Mechanism¹  and the Just Transition Fund² disburse time-limited funding in support of vulnerable regions, without establishing any universal right or guarantee of social protection for all European citizens. On the other hand, policy steering tools such as the European Semester³  and the Green Oath⁴ provide a series of guidelines contingent upon national and local political will, rather than direct, legally binding obligations.

This two-pronged structure — selective on the resource front and conditional on the regulatory front — stands in stark contradiction to the promise of leaving no one behind: how can temporary, geographically delimited instruments offer dependable, universal protection in the face of a transition that broadly impacts the cost of living, energy, and employment for millions of people? And is it realistic to expect the European Union to scale such guarantees universally (by establishing, for instance, transition minimum income schemes or universal reskilling allowances)?

Responding to this question, Maurizio Ferrera‘s analysis posits that the European Union is structurally incapable of upholding its universalist promises due to its “welfare deficit“. Modern social protection systems were historically consolidated within nation-states prior to the inception of the European project. This explains the current division of competencies: Member States hold exclusive authority over redistributive instruments (general taxation, welfare spending, labor protections), whereas the Union — originally established to ensure the functioning of the single market — wields significant regulatory power (allowing it to set binding constraints on governments, businesses, and citizens) but lacks genuine redistributive authority (it can neither levy direct taxes nor fund an independent social security system).

Consequently, the EU lacks the institutional competence to establish a universal welfare system to support the green transition, leaving it compelled to delegate social protection to selective financial funds and the discretion of individual national governments.

Compounding their selective nature, EU resources remain remarkably modest when compared to the systemic scale of the transformation: the entire Just Transition Mechanism aims to mobilize around €55 billion over the 2021–2027 period (of which €19.2 billion consists of direct grants through the Just Transition Fund), set against an investment need estimated by the European Commission itself at no less than €260 billion annually through 2030.

Three distortions determining who “will not be left behind” and who will

The structural limitations stemming from selective-conditional instruments and the welfare deficit are not mere theoretical abstractions; they translate into tangible distortions in the Green Deal’s effectiveness. Specifically, three factors determine the actual inclusion or exclusion of citizens from the green transition:

Factor 1 – The power of legacy industries: In the absence of binding EU regulations governing industrial decommissioning pathways, multinational corporations operate according to short-term market logic, scheduling abrupt closures and offloading the social costs of site abandonment onto public budgets. This was evident in the closure of the Grangemouth refinery in Scotland, where the unilateral decision of the private group Ineos bypassed local consultation plans.

Factor 2 – National political will: Non-binding European instruments leave social protection at the mercy of national governments’ political orientations. While strong institutional commitment in Scotland fostered advanced participatory processes (albeit hampered by the lack of enforceable powers over private actors), political and electoral allegiance to the extractive industry in Poland led the government to set a coal phase-out date as late as 2049 — openly misaligned with Green Deal timelines and stalling real industrial conversion.

Factor 3 – Local administrative capacity and inverse selection: Green Deal funds require complex bureaucratic planning and reporting. Frequently, local communities most dependent on fossil fuels possess fragile administrative structures and struggle to access resources compared to more structured entities. This triggers a distortion: funding ends up rewarding bureaucratic robustness rather than actual social need.

These three factors interact to form a clear barrier to the “Leave no one behind” mandate. Lacking a universal redistributive authority, the European just transition currently leaves entire demographics unprotected for disparate reasons: those not covered by selective funds, communities subject to unilateral corporate decisions, or those undermined by the administrative fragility of their local governance. Thus, new categories of excluded citizens emerge despite a universal promise of sustainability, equity, and fairness.

Three conditions for eco-social integration

The requirement of a just transition undoubtedly marks an advancement in European policymaking; however, it functions as a palliative measure: operating ex post and selectively to cushion industrial shocks, treating rather than preventing the emergence of structural socioeconomic vulnerabilities. Overcoming this weak eco-social integration requires three conditions, each designed to address the aforementioned limitations:

Condition 1 – Building genuine redistributive authority: The impacts of the Green Deal are protracted and direct, requiring compensatory measures to be equally sustained. It is therefore essential to overcome the welfare deficit by endowing the EU with greater autonomous fiscal capacity. While the EU already possesses own resources (customs duties, VAT shares, a non-recycled plastics levy, and Gross National Income-based contributions), these are earmarked for standard operational programs and servicing debt incurred for NextGenerationEU⁵. In negotiations over the next Multiannual Financial Framework (MFF), discussions center on introducing new green revenues generated by the Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM): the critical debate is whether these resources should solely repay past debts or serve as the initial fiscal pillar of a European eco-social welfare system.

Condition 2 – Ensuring full legal enforceability: Moving beyond the ambiguity of non-binding policy recommendations requires transforming eco-social principles into mandatory provisions. This shift demands the use of directly applicable European Regulations that establish true “social conditionality”. In practice, this would legally tie every green grant or public tender to non-negotiable clauses safeguarding employment and job quality, making them enforceable before both the Court of Justice of the European Union and national courts.

Condition 3 – Instituting stringent corporate accountability: Large industrial groups must be held to statutory requirements regarding advance planning and social responsibility. From a legislative standpoint, the EU should reinforce corporate sustainability due diligence and governance rules, mandating large firms to adopt transition plans negotiated with social stakeholders and prohibiting unilateral plant shutdowns without guaranteed vocational reskilling programs. Furthermore, the “Polluter Pays” principle⁶ must be extended to the social domain: corporations that have reaped decades of profit from fossil activities must be legally required to co-finance site reconversion, compensation, and early retirement/training schemes for workers, rather than offloading the entire burden onto state aid or EU public funds.

Toward a European “second welfare”

The convergence of these reforms would delineate the framework of a genuine European “second welfare”. Where first welfare equates to traditional public protections provided by nation-states, second welfare refers to the constellation of complementary initiatives mobilizing non-public actors (such as responsible businesses, social stakeholders, the third sector, and impact investors) in support of the collective good. In the context of the European eco-social transition, this translates into a governance model capable of bridging European institutions and non-public stakeholders (unions, industry, local authorities) in its actors, while linking environmental protection with social security through the introduction of universal rights in its policies.

Practically speaking, energy-efficiency retrofits for buildings or shifts in mobility would not fall upon low-income households in the form of cost spikes and energy poverty; instead, they would be secured through this multi-stakeholder network as universal entitlements to sustainable housing and clean transportation.

Green and just: an inescapable duo?

In the wake of these reflections, one might question whether the European Union truly needs eco-social integration as outlined here.

The answer is unequivocal: a social failure of the green transition would inevitably lead to its ecological failure. The absence of an integrated European welfare framework to govern the repercussions of the green transition invariably fuels populist backlash and electoral resistance against environmental policies — as demonstrated by widespread farmers’ protests and, earlier still, the Gilets Jaunes movement.

Eco-social integration is not an optional accessory to the green agenda; it is the indispensable democratic prerequisite for ensuring the transition remains robust, widely accepted, and enduring over time.

1. Just Transition Mechanism: the overarching package of EU resources, loans, and guarantees designed to help regions and workers bear the costs of phasing out polluting industries.
2. Just Transition Fund: the primary operational pillar of the Just Transition Mechanism, consisting of a direct grant fund to finance economic diversification and worker reskilling in fossil-fuel-dependent areas.
3. European Semester: the annual cycle of coordination and surveillance through which the EU analyzes Member States’ budgets and issues recommendations on economic, social, and environmental reforms.
4. Green Oath: the guiding principle of the Green Deal requiring all EU legislation and funding to “do no significant harm” to environmental objectives.
5. NextGenerationEU: the post-pandemic European fund exceeding €700 billion, financed through the issuance of common debt to support investments and reforms across Member States, with a strong focus on ecological and digital transitions.
6. “Polluter Pays” principle: a cornerstone of European environmental law establishing that the costs of preventing, reducing, and remediating ecological damage must be borne directly by the party responsible for the pollution, rather than falling upon society.