Op-ed: Green Deal’s social costs threaten the most vulnerable

Adequate funding and targeted measures are needed to support those who lack the financial resources to adapt to the transition.
Elderly woman with carer

By João Verdelho, Donal Brady and Clotilde Clark-Foulquier

João Verdelho, Donal Brady and Clotilde Clark-Foulquier work at Eurodiaconia.

23 Dec 2024

@Eurodiaconia

Vulnerable communities and the social organisations that care for them face rising costs and difficulties under the Green Deal. This may leave them in the cold as, in its quest to balance various interests including strong economic and industrial pressures, it omits adequate support for social needs. 

At Eurodiaconia, a network of 61 churches and Christian NGOs across 33 European countries, we represent more than 30,000 social and healthcare service providers and advocates for social justice. Our organisations recognise the urgent need for a just environmental transition, but report concerns that the current plan does too little to protect vulnerable communities. 

Acknowledging this reality does not undermine the need for green policies, but rather emphasises the imperative to refine them. 

Carbon pricing concerns

The EU’s second Emissions Trading System (ETS2), covering emissions from road transport and buildings, is expected to have significant social impacts when it takes effect in 2027. The main concern is that carbon pricing on road transport and building fuels will increase the cost of everyday essentials such as heating and transportation, disproportionately affecting low-income households. 

The Social Climate Fund, designed to mitigate this negative social impact, is insufficient for this task, with analysts now forecasting a potential rise in fuel prices of 50 cents per litre due to ETS2, piling additional financial strain onto households and social service providers already grappling with rising living costs. 

The cost of compliance

Less obvious changes are no less worrisome. The revision of the EU Waste Framework Directive, for example, would shift the financial burden of waste management from local authorities to producers, including social economy actors. Some of our members in Denmark and Sweden report that these risks add compliance costs to already underfunded social economy actors, reducing their ability to serve vulnerable communities. 

Social and healthcare service providers also face new energy performance requirements under revisions to the Energy Performance of Buildings Directive (EPBD), as well as hurdles in access to financing. The EU Sustainable Finance Action Plan requires the integration of sustainability factors (ESG criteria) into banks' risk management and credit strategies. One effect of this will be to hinder social organisations with energy-inefficient buildings in securing affordable loans. 

In Germany, a Eurodiaconia member reports having to sell properties and rent newer facilities, as rental costs can be subsidised, whereas renovation costs cannot. In Latvia, one of our members intended to shift its vehicle fleet to electric cars to reduce its carbon footprint, but the lack of financing options meant it had to resort to purchasing traditional combustion-engine vehicles. 

Calls for a robust framework 

While the Green Deal aims to foster a greener economy and combat climate change, its current structure risks leaving behind not only vulnerable populations but also social economy actors and social service providers who lack the financial resources to adapt and are not supported adequately in the transition. 

Without a robust framework that addresses these unseen social costs, the Green Deal implementation could undermine broader environmental goals by alienating vulnerable groups. As policymakers move forward, they must prioritise social equity alongside environmental sustainability to ensure that no one is left behind.