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Bachelor's Degree programme

in Philosophy,
International and
Economic Studies
“ordinamento”
(2015/2016)

Final Thesis

JUST TRANSITION POLICIES.


Towards post-growth and sustainability.

Supervisor
Ch. Prof. Barbara Da Roit

Graduand
Giulia Guazzo
Matriculation Number 864389

Academic Year
2021 / 2022
CONTENTS

1) INTRODUCTION
3
2) SUSTEINABILITY
5
3) WELFARE STATE AND WELL-BEING
9
4) JUST TRANSITION
11
5) E.U. and JUST TRANSITION
20
6) CONCLUTION
25
7) BIBLIOGRAPHY
27

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CHAPTER 1

INTRODUCTION
In the last century, nature was perceived as something distant, unrelated and outside our
existence and, for this reason, it was exploited as an infinite reservoir of resources, endangered
and corrupt for the satisfaction of our personal needs. It is now evident that a paradigm shift is
needed. If we were taught to enforce our will and subdue the others in a never-ending
competition, we need to learn to democratically govern the world, respecting others and
collaborating to solve problems. If before the economic growth profited by an unregulated use of
natural and human capitals, now the economy must sustain the well-being of the environment
and of the people. This is what sustainability means: to stop economic competition and insane
growth and to take responsibility. Education and self-control become the new weapon for a green
transition.
Today, everybody talks about sustainability and environmentalism. The effects of global warming
are increasingly manifest and shocking. More and more people are joining the environmental
cause and activism, asking for protection and political intervention. International environmental
treaties and UN resolutions underline a problem that can no longer be ignored. Governments of
the world are jointly working to manage climate change and its pressing implications. Which are
the proper solutions? Is it possible to achieve an environmental and social solution? In this essay, I
am going to explore the intricate world of environmental justice: a match between social and
environmental policies. This idea is rooted in the welfare culture: to help and assist the most
vulnerable, to use the economy to spread equality and to reduce disparities. In this framework,
the environment becomes part of our social heritage that must be safe-guarded, not only for our
own self-interest but to give dignity back to nature. We are going to examine policies, social norms
and actions that are able to solve both ecological and social imperatives.
Even if taking into consideration the transitional economic and social consequences in the
developing countries would have been equally motivating and full of insights, this analysis would
mainly focus on the necessities, approaches and relationships present in the Western World.
Somehow, I feel like I'm missing an important side of the whole story: the discourse on climate
change is a global and inter-related issue, complicated and characterised by a huge variety of
actors, factors and forces. The international community should aim at bringing ecological
awareness, eco-friendly behaviours and welfare all-over the world. That’s fundamental to achieve
social and environmental justice: the poorest in the world should not be left behind and the
environmental problem can only be solved with global effort. That’s said, I have chosen to adopt a
Western point of view because:
1. I need to keep the analysis as more linear as possible: it is more simple to highlight
correlations, casualties and frequent patterns by taking into consideration a pretty much uniform
social, political and economic entity;
2. the developed countries and their economic activities contribute and have historically
contributed more to environmental degradation, CO2 emissions and global warming;
3. the welfare system is more widespread and sophisticated in the Western realm, so I can
more easily collect case-studies, policies and results.

2
The review will proceed as follows: at first, I will consider the theoretical framework under which
just transition is conceived: Post-Growth Model and the Welfare State. The main assumption of
the previous one is that evidence shows how economic growth is inevitably linked to
environmental degradation and CO2 emissions; the former is a political and economic system that
pursues economic development while promoting equality and protection of the less advantaged in
the society.
Secondly, I will couple the well-being and sustainability imperatives. ‘Just Transition’ policies. I will
address this transitional approach by underlining benefits and flaws, explaining the regressivity or
progressivity of policies and taxation, pointing out costs as well as new opportunities they are able
to create.
Third, I will compare the theoretical policies with those promoted by real institutions and
government agendas. By doing so, I will take into consideration the context of the Covid-19
pandemic and the response that the European Union gave to meet sustainable and socially fair
transition.

3
CHAPTER 2

SUSTEINABILITY
2.1 POST-GROWTH
During the last century, the main focus of governments, entrepreneurs and international
organisations was economic growth as an increase in GDP levels and high consumption. Countries
have been identified as ‘developed’ or ‘developing’ considering their GDP per capita. Growth of
GDP has been favourable for employment and the development of the welfare state. High levels
of consumption have been signs of prosperity and progress. ‘The more the better’ has been the
underlying motto of the century. However, economic growth is not for free and it comes at the
expense of the environment. Unconstrained growth has fostered better living standards. At the
same time it has entailed air and water pollution, high levels of greenhouse gas, loss in
biodiversity, depletion of natural assets, land erosion and acidification.
It is proven that pollution and environmental damages are strongly correlated to economic growth
(World Bank, 2020) (Figure.1). Developed countries have influenced the increase of CO2 emissions
both directly, producing and emitting domestically, and indirectly, importing carbon-intensive
goods and services from developing countries. China, India, Brazil and Indonesia account for 42%
of the world’s population and 23% of cumulative emissions (1850-2021). In contrast, the US,
Russia, Germany, the UK, Japan and Canada account for 10% of the world’s population, but 39% of
cumulative emissions (Evans, 2021). This huge disproportion highlights the correlation between
economic growth and environmental damages. Moreover, more developed countries have a
higher level of cattle consumption which is responsible for heavy CO2 emissions and high use of
water (Navarrete-Molina, Meza-Herrera, Herrera-Machuca, Lopez-Villalobos, Lopez-Santos and
Veliz-Deras, 2019).
Aware of the responsibility governments, citizens and firms have, the Paris Agreement (2015) has
posed severe challenges on governments in order to limit global warming to 1.5°C. Based on the
correlation between climate change and economic growth, some scholars have developed new
economic theories based on the post-growth model. This new model asks for a global steady state
economy where the ability of the planet to restore it-self (reproducing the resources needed for
human consumption and assimilating the human waste) is preserved (Büchs, 2017). In this sense,
environmental protection is opposed to the capitalist system that exploits natural resources to
reproduce and increase itself. Indeed, post-growth theories have conceived an economic model
with normative features: a new scale of values is drafted (Laurant, 2021).
First of all, human well-being is not disparaged but it is used to challenge the idea of economic
growth. Post-growth doesn’t imply economic recession but it wants to achieve human prosperity
and development with sustainable means. Second, improving efficiency alone is not enough to
guarantee ecological success, it is also necessary to reduce the level of consumption. In our
society, there is a high level of commodification to support social status, absorb production and
prevent stocks of goods. This is unhealthy both psychologically and economically. Status
competition causes anxieties, stress and frustrating relationships, while useless or superfluous
goods are a waste of money and natural resources. Cooperation becomes a new value that stands
against individualism and harsh competition. People are induced to work together to build up a

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world that preserves the planet and future generations. Third, a global production should be
avoided because resource-intensive, exploits child labour and depends on high consumptive
activities. A renewed local economy is proposed where consumers and producers are reunified
and work jointly within a short production and consumption cycle. Only necessary commodities
are produced in eco-safe circumstances. Finally, it should be remembered that this transformation
takes place in a context of democratic debate: any decision should be supported by the public
opinion and carried out by a social choice, not imposed from moralising forces.
This complex system should encourage a transition from a capitalist economy based on growth,
profit, consumption and competition to a non-growing economy (steady state economy) based on
environmental protection, well-being and cooperation. Happiness is the new pivot where
environmental, political and social health is better than wealth.
Figure.1) Relative change in main global economic and environmental indicators from 1970 to 2018

Source (https://www.eea.europa.eu/legal/copyright) Owner: European Environmental Agency (EEA). Data from Olivier and Peters
(2020) for greenhouse gas (GHG) emissions; UNEP and IRP (2018) for material footprint; and World Bank (2020a) for GDP.

2.2 PRODUCTION AND CONSUMER PREFERENCES


In order to obtain a deep transition, it is necessary to intervene and correct the consumers’
behaviour as well as the production techniques and practices. Production and consumption
mutually influence each other: one small change in one side completely shifts the total
equilibrium. For example, if a government imposes a carbon-tax or plastic-tax, carbon or plastic
intensive goods would become more expensive and consumers would substitute them with more

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sustainable ones. On the other hand, if a government educates the population towards a more
sustainable life-style, consumers’ preferences would change and production would adapt by
adopting new green practices and using ecological materials. Effective political and economic
policies cannot underestimate this synergy in order to achieve a correct systematic change.
In the first place, it is necessary to deliver sustainable information to the consumer, educating the
population about the main eco-friendly solutions and improving the abilities of purchasers to
recognise and select commodities that are less harmful to personal and environmental health.
Institutions should clarify recycling rules, profess to favour durability rather than accumulation,
promote more options for plant-based diets and teach to reduce superfluous consumption.
Additionally, to ease this process, there should be the adoption of green certifications and labels
that awards brands that choose environmentally sustainable practices and values providing
information about origins and sourcing of their products. Many consumers are also discouraged by
the higher cost of sustainable goods and brands. This can be solved by manipulating the market
prices through increase or decrease of taxation for unsustainable or sustainable items. Consumer
education can also better the ability of consumers to express their preferences in the market,
influencing product variations and services and soliciting the production of ecological
merchandise. Plus, more awareness of the public should broaden political support toward
ecological causes and increase popular involvement. Another method it’s to intervene in the
leisure-consumption preference of consumers. If people start to value more their free time, they
would spent a greater amount of their wage in exchange for leisure. Consumption would
consequently fall.
The other face of the coin is production. It is possible to build a sustainable business and improve
the standards of its supply chain. Factories should reduce their inventory by predicting and
adjusting supply and demand, for example many firms are already adopting policy of producing
new articles as soon as they receive the order, eliminating costs of stock-up and of unsold items.
This solution is both cost and environmentally efficient. More complex is to cut carbon emissions
and become part of the circular economy. Using green energy is more expensive and requires high
initial investments that some are not willing to undertake. Products and materials from the
economy (recycled ones) are more expensive and less performant than those obtained by new
raw materials. Designing new goods freed from pollutant components or easy to recycle takes
investments in the R&D sector and conversion of the productive techniques. Producing durable or
repairable goods is inconvenient in the logic of market competition. Even if counterintuitive
though, this new approach towards sustainability can generate new job opportunities and
markets. There is more room for handmade goods which sustainable artisans can produce up-
cycling (that means to generate more market value from something that is recycled) and sell
locally. Highly specialised designers are required to project avant-garde products following
ecological norms, as much as researchers that are able to find new green materials and less
carbon abundant productive techniques. Databases and platforms are needed to exchange
products and materials for reuse, plus consulting abilities are request to suggest new and
affordable solutions to companies looking out for transition.
These are social and cultural reforms, not only economic ones, and require smooth and slow
transformation of people’s behaviours, life-styles and consumption choices. This kind of
transformation is time-spending and very complex in so far as what is perceived as valuable must

6
become in accordance with what is sustainable. Valuing the respect of the environment and
human rights when purchasing and producing should become parts of everyone’s autonomy (from
Greek autos -self- and nomos –law- as self-regulation).

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CHAPTER 3

WELFARE STATE AND WELL-BEING


The main objective of the welfare state, as it has risen since the late 19th Century and further
developed, has been to protect citizens and workers from risks connected to the commodification
of work. This has been traditionally brought about through a security system that protects from
the risk of illness, invalidity, old-age and unemployment. Subsequently, health care, education,
child- and eldercare and care for the disabled made the object of dedicated policies.
According to the most influential typology, welfare systems (or regimes) can be distinguished in
(Esping-Andersen, 1990):
1. The ‘liberal’ or Anglophone welfare: characterised by modest subsidies and few protections
on the lower classes, the market is free to function with the least amount of government
intervention in order to guarantee efficiency. There is high privatisation of the education, pension
and health system.
2. The ‘corporatist’ or continental welfare tends to be more pervasive: there is nationalisation
of education, pension and health, protection of low-income strata and more vulnerable members
of society. Social solidarity leans on the concept of family and its preservation.
3. The ‘social-democratic’ or Nordic welfare is the most performant: there is high state
intervention not only to impose economic redistribution and social security, but as a normative
power. The state promotes solidarity among different classes and identification with
collectiveness, moving from individuality to sense of belonging. Decommodification is used to
improve equality, reduce competitiveness and achieve a universalistic social program.
Welfare has consistently changed over time. In the period after the Second World War there was a
strong expansion of the welfare system in the Western countries. Favoured by an expanding
economy and high employment rate, a strong tax system was introduced to balance social and
economic inequalities and reduce poverty. High taxation was fundamental to sustain government
spending and the implementation of redistribution policies. Due to the oil crisis and economic
stagnation, in the 70s neo-liberalist feelings rose: consequently governments changed their
political goals and laissez-faire became more attractive than distributional and social security
purposes. In the continental states, the new key-word was austerity: the welfare state was
preserved to satisfy political needs, politicians couldn’t deny to voters and taxpayers basic social
programs but there were substantial cuts on expenditures and it was necessary to reduce debt
while guaranteeing economic growth.
Regardless of its forms, the welfare system has a strong social value, it is a safety net that protects
the more vulnerable part of the society. Citizens must sacrifice part of their liberties (mainly
economic liberty) in order to obtain more equality: Gini indexes are lower in countries with a
strong welfare apparatus. Moreover, well-being is sharply increased in welfare states: welfare
states usually are linked to higher life-expectancy (citizens use to live more years), higher living
standards, better education levels, lower level of criminality, lower gender inequalities and better
environmental conditions (Figure.1). This is a powerful social impact that generates a virtuous

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circle able to connect happiness with development. That’s why citizens value welfare reforms and
programs so much: they feel protected as workers and improved as human beings.
Figure.1) Annual average growth rate, 1870–2007 (%)

Source: Prados de la Escosura (2015) and author’s calculations

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CHAPTER 4

JUST TRANSITION POLICIES


In this chapter, I will address the problem of ‘Just Transition’: a set of policies able to answer both
environmental and welfare imperatives. Ecological transition is usually perceived as an expense in
terms of money and jobs (like coal mining and other polluting activities), but Just Transition takes
care of those workers that lose their job due to transition, the health of citizens and it serves
redistribution matters by rebalancing the environmental order. Just transition is a better way for
cities and states to transition away from polluting practices while pursuing the farewell of the
community. It is about protecting nature and biodiversity in accordance with human needs. The
health and well-being of both the environment and people are prioritised over the profit of
industry. It’s the idea that if we don't have disposable energy, soil and natural resources, then we
need to learn how to use them wisely to enjoy a high quality of life for everyone without trashing
the planet. Ecological justice is realising that environmentalism and welfare state problems are not
mutually excluding but connected, that we can solve one to solve the other.
As I have pointed out in the second chapter, the welfare state pursues an equal and fair society in
many ways, from education to health and less advantaged protection. Trying to cover them all is
not the purpose of this paper, then the main focus will be put on the redistribution problem
considering dangers, behaviours and solutions. Redistribution refers to everything that is aimed at
rebalancing the economic conditions between the richest and the poorest. Consequently, ‘just’ is
meant as proportionate and inclusive: a ‘Just Transition’ distributes burdens progressively (asking
for more to those who have more) or at least equally and involves responsibility from every social
class, minority and individual. That said, it is obvious that all aspects concur to generate human
well-being: education is essential for economic equality and forming environmental awareness,
environmental health is strictly correlated to the health of the people; these aspects cannot be
disregarded in toto.
4.1 ENVIRONMENTAL EXTERNALITIES: WHO IS RESPONSIBLE FOR POLLUTION?
In order to better understand the correlation between redistribution and sustainability, we first
need to identify who is more responsible for climate change and who bears the burden of a
sustainable transition. This is essential to fairly arrange economic forfeits and compensations. We
must look at what negatively influences both the environment and social justice to grasp which
policies are able to simultaneously address both.
In economics, externality is the term used to denote all those costs or benefits that influence
firms, individuals or any other third party due to the activity of someone else. For example, if the
government builds a road, enterprises and citizens nearby can use the road for free, this is called a
positive externalities because it generates a benefit for the other parties. The same concept is
used for the ecological impact of business and consumers: for example the use of cars and vehicles
produces CO2 that is a cost for the society, and then it is said that the deriving air pollution is a
negative externalities for the society. Another example is the release of wastewater into natural
water. The firm has a positive externality because it can better off using indispensable resources at
a very low price while reducing the costs of waste disposal. On the other hand, there is a social
cost: the negative externalities are identified in terms of acidification or toxicity of water, higher

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insurgence of correlated diseases, reduced productivity of farmlands in the peripheral areas and
harm on plants, fishes and other animals. This type of damage is called environmental externality.
There is an inequality in contribution: the people who are more responsible for negative
environmental externalities then others. The richest 1% emit 14-19% of total global CO2 emissions
and the richest 10% emit 40-51% of the global total. 'The poorest 50% emit just 11-15% and the
poorest 10% somewhere in the range of 0.9-1.5%' (Chancel and Piketty, 2015). The most polluting
industries are: fuel industry, agriculture, fashion industry, food retail and transport. In the 2020,
34.81 billion tonnes of CO2 emissions were produced from different fuel types, mainly coal, oil and
gas (Ritchie, Roser and Rosado, 2020). The livestock sector and the consequent agricultural
activitiy require 7.1 billion tonnes of CO2 and 14.5% of total greenhouse gas emissions (FAO,
2013). The fashion industry produces 10% of the global CO2 emissions. Food retail is responsible
for high production of single-use plastic and waste. Transport contributes over 20% of carbon
emissions: commercial freight is 40% of the total, while passenger travel accounts for 60%
(Omondi, 2021).
4.2 WHO IS MORE ENDANGERED BY ENVIRONMENTAL DEGRADATION?
The richest part of the population is more responsible for pollution than the poorest one and, at
the same time, there is not a fair distribution of environmental burdens within individuals too:
environmental damages tend to be harsher on the most vulnerable.
Climate change generates many natural catastrophes: the rising temperatures are responsible for
severe storms, heatwaves, hurricanes and an increased number of wide fires, the desertification
and erosion of the soil exacerbate earthquakes and floods. Everybody is being impacted by these
events but the poorest people get hurt first and worse. The low income people live in older and
less solid houses that get more easily razed to the ground and are situated in more dangerous
areas. Plus, they usually cannot afford insurance against accidents for this reason when a climatic
event occurs they lose everything.
Moreover, rich people prefer estates surrounded by big parks or pollution-free areas of the city
where air and water is cleaner and healthier. The wealthier ones enjoy more environmental
benefits: green spaces, recreational areas and bike paths are situated in the vicinity of more
expensive residences. These houses are built with the most safe and innovative materials. The part
of society that experiences higher poverty tends to live in the proximity of transportation facilities
(like airports), power plants and industrial zones because they are cheaper and they have few
alternatives in terms of where to live and work. These areas are subject to massive pollutant
contamination but many of them have little awareness about the dangers. This is due to lower
access to information (like source to internet) and a lower educational level. Additionally, the most
disadvantaged have less political power, they haven’t got the means to express their needs and
change the situation because they are excluded by influential political lobbies. For these reasons,
many residents get trapped: then they cannot move from their homes because they don’t have
the money to buy a new house and they are not willing to sell their old one to an unsuspected
unlucky customer.

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4.3 JUST TRANSITION SOLUTIONS
From the previous observations, we can conclude that there is a strong correlation between
poverty and the negative effects of climate change. The most vulnerable in society are the most
affected by global warming, creating a vicious cycle where clustered negative consequences work
together at the expense of the poorest, making a bad situation worse. However, if we consider the
problem in the other way around, more welfare would imply more sustainability and ecological
attitude. Economic redistribution should be the basis for more ecological policies: an
environmentalist government must be sensitive to protect the needs of the low-income
population to avoid strengthening economic and ecological problems. This is the underlying
conceptual framework of just transition policies that are able to reconcile the political exigencies
of anti-poverty and environmentalist groups.
Policies can be divided in three main categories according to aim (Fitzpatrick, 2011):
1. Regulations: can vary from international treaties to national laws and are meant to set
GHGs limits, guaranteeing environmental standards and quality targets. This is pursued by
imposing sanctions on polluters and other enforcement approaches.
2. Economic incentives: are the engine of transition. Environmental changes are expensive
and need initial financial support by the government. Moreover, they are fundamental for
redistribution, avoiding that green taxes or regulations hit more those who have less opportunities
to meet environmental requirements.
3. Education: is essential to convert consumer behaviours, from consumerism to wise
environmental demand preferences.
Let’s see in more detail these policies: what they propose, how they affect the poorest and if they
work in synergy with one another.
4.3.1 REGULATIONS
Polluter-pays-principle (PPP) is an economic and juridical means used to address environmental
externalities. For the first time, in the ‘Recommendation of the Council on OECD Legal Instruments
Guiding Principles concerning International Economic Aspects of Environmental Policies’ it was
articulated as follow:
‘The principle to be used for allocating costs of pollution prevention and control measures to
encourage rational use of scarce environmental resources and to avoid distortions in international
trade and investment is the so-called “Polluter-Pays-Principle”. This principle means that the
polluter should bear the expenses of carrying out the above mentioned measures decided by the
public authorities to ensure that the environment is in an acceptable state. In other words, the
cost of these measures should be reflected in the cost of goods and services that cause pollution in
production and/or consumption’ (OECD, 1972).
This regulatory method has three main objectives: economic, equity and pedagogical rationale.
First, it tries to balance the environmental externalities given by production and consumption:
there is a more efficient allocation of resources because the environmental cost is internalised in
the cost of the final good (ex. Pigouvian tax). This means that producing and buying resource-
consuming and polluting goods and services become more expensive and inconvenient. Second,

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PPP brings equity: without this principle, the cost of environmental damages would be socialised,
the whole society (especially the low-income households) would pay for the unconstrained misuse
of natural resources. Vice versa, PPP recognised polluters that are obliged to compensate the rest
of the society. This is especially important internationally: the countries that have mostly polluted
must contribute more to restore environmental conditions and fight global warming. Finally, there
is a pedagogical goal: the increase in price generates a sense of responsibility, bringing awareness.
(Khan, 2015). Eco-friendly products and healthier food (that is usually produced with
environmental attention) are more expensive, for this reason low income strata would make bad
ecological consumption decisions. This is both an ecological and a social problem: on one hand,
more GHGs and chemicals are spread in the environment; on the other, there is a social risk of
stigmatising the poor as unethical or careless. If the cost of pollution is internalised, it would be
easier to distinguish eco-friendly goods from the rest and spread virtuous consumption
behaviours.

ENVIRONMENTAL TAX
Environmental taxation is a regulatory policy and can be defined as ‘any compulsory, unrequited
payment to the general government levied on tax bases deemed to be of particular environmental
relevance. (OECD [Organisation for Economic Co-operation and Development], 2004). Table (1)
reports some of the main examples of environmental taxes divided by sector. The main objectives
of environmental taxation are to reduce emissions and pollution, to foster the use of cleaner
energy and to address unsustainable production and consumption; but is it just taxation too? The
fairness of taxation is measured in terms of progressivity or regressivity: a tax is said to be
progressive if it asks for more to the richest compared to the poorest, vice versa it is regressive if it
economically affects the poorest more than the richest.
It is not an easy task to evaluate the progressivity of a tax, because it depends on many different
aspects: from consumption preferences and income distribution, to level of urbanisation and
features of the national economy. Taxation imposes an increase on goods and services that it is
not easily foreseeable. In general, we can say that taxes applied to the use of energy and water
tends to be more regressive (Cottrell and Falcao, 2018). First, a higher proportion of income of
poor individuals is spent on basic necessities (food, energy and fuel). Secondly, poor households
live in less energy and water efficient facilities: wealthy people have more sophisticated cooling
and warming systems like the hydraulic one and can install solar panels to domestically produce
energy. Older houses have more energy dispersion due to old systems for energy production, lack
of thermal coat and windows able to contain the heat, inefficient ventilation systems and leaking
plumbing.
Transport taxes (like vehicle registration taxes) and transport fuel taxes are generally progressive
or neutral (Cottrell and Falcao, 2018), because low-income households usually own less cars per
family and consequently consume less fuel. Moreover, the lowest income strata tend to use more
public transports and cannot afford frequent flights for business nor for leisure and neither other
luxurious means of transport (like sportive cars, cruises, etc.). Little literature is available on taxes
on biodiversity, waste, natural resources and agriculture, then it is difficult to give a general
outlook about them (Cottrell and Falcao, 2018).

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Source: J. Cottrell, K. Schlegelmilch, M. Runkel and A. Mahler, (2016), ‘Environmental tax reform in developing, emerging and
transition economies’, Bonn, Deutsches Institut für Entwicklungspolitik.

Environmental taxation has many regressive turning points, but it is mainly effective in fighting
pollution, global warming and ecological damages. Moreover, taxation has a positive impact in
changing consumption preferences. For example, in 2002 the Irish plastic bag tax reduced the
purchase in plastic bags by 90% within a year (Cottrell and Falcao, 2018). For this reason,
environmental fiscal policies should not be dismissed but accompanied by subsidies and economic
aids to counteract the negative impact on the most vulnerable.
EMPLOYMENT REGULATION
Employment has always been one of the major worries in the welfare system, because a high level
of employment is associated with economic growth that is essential to finance the policies

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pursued by the welfare state. In the post-growth welfare model that aims at decommodification
and at a steady state economy with low or zero growth, it is essential to reform and regulate the
employment system too. There should be a key cut in the amount of hours spent at work by
employees. This have four direct eco-social consequences:
1. there would be a fairer distribution of the working hours within the population and the
unemployment rates would fall: there would be less people who live under the poverty line and
more economic equality among individuals;
2. there would be an increase in the level of well-being and quality of life: more leisure time
to spent in sport, personal care, education, care for elders and children, plus local involvement
and cooperation;
3. reducing working hours means to break down the harmful behaviours of working to
consume: it would reduce the consumption of display and superficial goods and increase the
spending on basic necessities and leisure;
4. it would decrease the stigma on unemployment, that is perceived as an individual choice of
lazy and incompetent people rather than a structural feature of the present economy (Gough,
2012).
SUSTAINABLE MOBILITY MODEL
Sustainable mobility is one of the major challenges faced by developed countries involved in green
transition. The main four actions that can be adopt to improve the mobility are:
1. SUBSTITUTION EFFECT: entails reducing the activities that need the use of cars and private
vehicles. Some example are: fostering smart-working and Internet shopping,
2. MODAL SHIFT: is to promote walking, the use of bikes and public transport. This could be
even beneficial to reduce the level of obesity and healthy problems related to sedentary life-
styles. Methods to achieve a modal shift are: increasing annual vehicle taxation, road pricing,
decreasing the price of public transport, increasing the quantity and quality of cycle and bus
networks, slowing down the traffic and increasing limited traffic areas, etc.
3. DISTANCE REDUCTION: is more complex because it involves the reorganisation of the
urban areas. In order to reduce the distance and travel patterns, policies should redesign the
location of buildings and facilities and connect the households with primary services.
4. EFFICIENCY: is achieved both by implementing the public mobility and by encouraging the
use of new technology like electric cars, alternative fuels and more efficient energy design
(Banister, 2008)
Sustainable mobility model is frameworked within a different paradigm: from mobility to
accessibility. Today the main focus of transport planning is to facilitate the ride of cars and other
vehicles, the planning is conceived in the large-scale, taking in consideration the practicability of
solutions and the time needed to travel. The sustainable mobility model is socially oriented: it
takes into consideration the exigencies of the people, the needs of pedestrians and cyclists are
prioritised over those of vehicles and it is contextualised in the local realm. To implement an
efficient transport planning means to satisfy environmental and social concerns; for this reason,

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travel time minimization and drivers’ comfort are outclassed by security within the roads,
liveability of public zones and reliability on the travel time (Marshall, 2001). The social benefits are
evident: sustainable mobility increases the well-being of roads, cities and towns, plus it has an
egalitarian impetus. The wealthier people make a higher use of cars, while the lower income
population tends to use more public transports: a reform that lowers costs and raises standards of
public mobility can really serve social aims.
WASTE MANAGEMENT AND CIRCULAR ECONOMY
Every year approximately 2 billion tonnes of municipal solid waste are produced, high-income
countries (16% of world’s population) account for the generation of 34% of total solid waste.
Moreover, at least 33% of the total solid waste is disposed of in respect of environmental safety
(Fontecha, Nikolaev, Walteros and Zhu, 2022). The management of the waste must be reorganised
to use at best natural and non-renewable resources and to avoid dispersing toxic refusals in the
environment. Environmental safeguard and resource efficiency are the pillars of Circular Economy:
going from a linear economic process ‘Take, Make and Dispose’ to a new economy that is able to
follow the natural reproductive circles. This economic idea is very fascinating, but which are the
redistributive and egalitarian aspects?
In the developed countries, the Circular Economy leads to a great transformation within the
employment apparatus: this transition entails job creation, substitution and elimination. On one
hand, we see the creation of new employment opportunities: from eco-design, repairing and
green services to the developing of new innovative materials, use of energy and manufacturing
processes. There is consequently an increase in demand for highly skilled and trained employees.
On the other hand, many non-environmental friendly jobs and sectors are going to be eliminated
or at least replaced. If the transition is not accompanied with solid financial support, there is the
risk of increasing economic disparities: if the most vulnerable job categories are not trained and
absorbed in the new green and circular economy, a huge proportion of workers is left out of the
labour force, increasing the levels of unemployment and poverty. For this reason, a just Circular
Economy requires economic incentives and spread of education to achieve social and
environmental profit (Schröder, 2020).
4.3.2 ECONOMIC INCENTIVES
We identify economic incentive, every form of financial relief and support aimed at fostering a
specific outcome. This can take the form of: direct incentive or subsidy (financial benefits), tax
incentive (reduction or elimination of tax) or negative incentive (financial punishment for certain
wrong behaviours). The economic incentives are frequently adopted in the welfare state as an
engine for redistribution, to spread well-being, equity and social justice. On the other hand, they
have a strong transitional power: to change consumer behaviours, to finance research and
innovation and to boost the adoption of new and greener technologies. The ECB’s climate risk
stress-test on the resilience of European firms and banks shows how ‘the short-term costs of
transition pale in comparison with the costs of unfettered climate change in the medium to long
term. The early adoption of policies to drive the transition to a zero-carbon economy would also
bring benefits in terms of investing in and rolling out more efficient technologies’ (ECB, 2021).
Particularly if done in the short-time, subsidies and other forms of economic incentives are
essential to counteract economic repercussions due to climate change.

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The EEEA (European environmental economic accounts) have gathered environmental subsidies in
two classifications: Classification of Environmental Protection Activities and Expenditure (CEPA)
and Classification of Resource Management Activities (CReMA). The first collects all those
expenditures and transactions on activities and products related to environmental protection:
going from inputs (like energy, wage and raw materials) and investments, to households’
expenditure and governmental aid programmes and taxes. The second organises all those
expenditures related to the defence, maintenance and improvement of the natural resources: this
includes management of water, forest resources, wild flora and fauna, energy resources, minerals,
plus research and development activities (Eurostat, 2015).
Moreover, as previously pointed out, there is the need for a balance between regulation and
economic incentives to assure social and environmental justice. In the present welfare state,
reducing the national debt and austerity are prioritised. To achieve a deep and multi-
comprehensive green transition, government must finance new economic plans, supplying money
to firms, organisations and households.
4.3.3 EDUCATION
As we have seen in the previous paragraphs, education is the link between the social and the
environmental purposes: it is impossible to achieve a stable and uniform ecological transition
without education. It favours awareness, better consumers’ behaviours and job re-training. By
doing so, it reorganises society within an ecological pattern, shaping life-styles, personal values
and social norms. In addition, education brings uniformity: no one is left behind. Everybody learns
intelligent ways to take care of their environment, to make wise consumption and healthy choices,
unskilled workers can be reintegrated in the economy and no one is stigmatised for wrong
environmental behaviours. To form an inter-generational and inter-class environmental culture is
one of the main goals for deep political endorsement: if there is a national bottom-up feeling,
environmental activism and policies will be welcomed and encouraged.
To conclude, the three kinds of policy (regulation, incentives and education) are indispensable and
must be concomitant with one another. Green regulations are often regressive, affecting the
economic capacity and behaviours of the most vulnerable. Moreover, these are usually seen with
suspicion and rejected by the population if they are not motivated and integrated in the value
system. Unregulated and unaware subsidies can produce inefficient allocation of public money or,
in the worst scenario, can lead to an increase in consumption (environmentally bad), with neither
mitigating negative effects of regulations, nor balancing economic disparities (socially bad). Finally,
education is purposeless if the ecological transition does not entail a systemic shift of the economy
(both in the productive and consumptive sphere) and the welfare system.

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CHAPTER 5

E.U. and JUST TRANSITION


In the last years, we have witnessed major economic, political and social changes, exacerbated by
the Covid-19 pandemic. In this chapter, I want to analyse how and how much recent phenomena
have had an impact on the environmental behaviours that the European Union has developed till
now and which solutions are able to reconcile the welfare economy with environmental goals. On
the other hand, I will take a closer look at those policies that don’t fulfil environmental
requirements in a post-growth paradigm, explaining the reasons why this happens and showing
how this negatively affects the welfare system and the well-being of European citizens. The
European Union is an agglomerate of independent states that respond to challenges differently
within a common guideline. In this respect, I will point out strengths and weaknesses of this
particular state system that must deal with global transformations following shared values and
ends.

COVID PANDEMIC

The Covid-19 pandemics have hit and changed everyday life of people all over the world, altering
what we perceive as normal, from the health-care system, to the way people interact, the working
and schooling sphere and consumption behaviours. During this global crisis, we were asked to
think about our priorities, and to re-estimate what we used to take for granted. Unforeseeable
challenges and a short amount of time have put a heavy burden on the European leaderships that
need to cope with harsh problems within a spirit of cooperation and mutual help, finding joint
solutions that leave no-one behind. The economic recovery and the vaccination campaign
required strong logistic abilities, to make compromises between different opinions and demands,
to take control of strategic resources and to convey a large amount of capital to finance
interventions. Moreover, the European Union must preserve the integrity of its democracy and
the rule of law, which entail guaranteeing both first-generation rights (civic and political ones) and
second-generation rights (economic, social and cultural ones).

To sum-up, the EU must simultaneously solve a health crisis through cooperation, avoiding strong
economic repercussions and safe-guarding political, social and economic rights; if we add to the
equation environmental protection the picture becomes even more complex. How was the EU
able to manage such a tangled intent? Which strategies were brought about? Are they effective?
Which kind of problems emerged? In the end, can we say that the Covid-19 has been a cost or a
new opportunity for a just transition?

5.1 BEFORE COVID-19: EUROPEAN GREEN DEAL

The ‘European Green Deal’ (2019) is a document drawn by the European Commission and ‘aims to
transform the EU into a fair and prosperous society, with a modern, resource-efficient and
competitive economy where there are no net emissions of greenhouse gases in 2050 and where
economic growth is decoupled from resource use’ (European Commission, 2020). This
communication shares many purposes with other international environmentalist policies, like the

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U.S. ‘Green New Deal’, it is in compliance with the requirements of the ‘Paris Agreement on
climate change’ (2015), ratified by the EU, and with the UN’s 2030 Agenda. Its main objective is to
decarbonise our economy by protecting water, soil and biodiversity and converting to cleaner
energy; while at the same time providing more public transports, research and innovation, jobs
and skills training, healthy and affordable food and building energy efficient facilities.

As can be noted, the environmentalist transition is not decoupled by social and welfare targets.
Favouring the increase of public transport is a redistributive policy: it reduces the CO2 emissions
and simultaneously it helps the less privileged ones that cannot afford private means of transport
or want to reduce mobility costs. Training, research and education are central to improve the
labour force: the European Green Deal offers an ecological opportunity to bring innovation and to
generate new jobs. Healthy and affordable food is also an important challenge to help the less
advantaged. Fast and junk food is mainly consumed by the poorest section of the population
because it is cheaper; this kind of food is of lower quality, filled by food preservatives and
producein in poor ecological ways. Moreover, it contains high levels of fat and sugars that, if
assumed frequently and with high dosage, increases the risk of heart attack and other diseases of
the circulatory system. Producing healthier food means to cut the ecological and social impact that
a bad alimentation entails. Finally, improving the energy efficiency of buildings is fundamental
both from a green and welfare standpoint. Low energy efficient buildings require more heat to be
warmed up, this implies that: first, they consume more energy and produce more CO2; second,
they are more expensive. If we consider that lower classes spend a great amount of their wage in
housing, these eco-social investments can remove a heavy burden on them.

All this considered, the European Union has taken its steps toward an economy that defends the
environment and the most in need. Although this is only a declaration of intents; I will further
analyse more tangible policies that can be real game changers in the international realm. This said,
it is important to remember how deeply this sort of communication shapes the mentality and
perspective of the people: pointing out priorities and good behaviours is essential for a transition
that involves the population as a whole. Great budgets are pointless if there is not an underlying
social transformation able to pull out the best from economic resources.

5.2 THE NEXTGENERATION-EU

Due to the outbreak of Covid-19 pandemic, the Green New Deal is been integrated in the EU long-
term budget for 2021-2027 of €1.074 trillion combined with the NextGenerationEU, of €750
billion, a temporary recovery fund from the pandemic able to accelerate digitalization, innovation
and sustainability in the continent. The European Commission with the European Parliament and
Council of Member States has conceived five different packages of reforms to pursue these
objectives: the Horizon Europe, the Digital Europe programme, the Just Transition Fund and the
Recovery and Resilience Facility.

Horizon Europe is a €95.5 billion (in current prices) research and innovation programme, is part of
the EU long-term budget and includes €5.4 billion from the Next Generation of the EU. Its main
purposes are ‘strengthen EU science and technology thanks to increased investment in highly

19
skilled people and cutting-edge research; foster the EU’s industrial competitiveness and its
innovation performance, notably supporting market-creating innovation via the European
Innovation Council and the European Institute of Innovation and Technology; deliver on the EU’s
strategic priorities, such as the Paris Agreement on climate change, and tackle global challenges
that affect the quality of our daily lives’ (European Union, 2018). This is an economic plan, rather
than a welfare or environmental one. The main highlights are innovation, competitiveness and
digitalization. However, it is considered within a general eco-social framework: welfare and green
transition are tools rather than ends.

The Digital Europe programme funds €7.6 billion (in current prices) for digital improvement. It
doesn’t contain any particular reference to ecologists nor social engagements, for this reason I will
not enter in much more detail.

The Just Transition Fund is particularly careful about the environmental matter and will supply
€17.5 billion (in 2018 prices) in green transition. This fund is interested in providing support and
assistance to convert existing and new firms. This means to use efficient energy and resources, to
implement greener innovation and research and to teach new eco-friendly skills to workers
(absorbing unemployment and increasing the amount of high-skilled workers). The ultimate goal
is to cut carbon emissions of the productive force. An interesting insight of this financial program
is that it promotes local adjustments and solutions. Every project is meant to achieve ecological
goals following autochthonous necessities and economies. Moreover, the Commission has
considered assistance tools and technical support to help those eligible to properly transit.

The Recovery and Resilience Facility makes available €723.8 billion (in current prices) in loans
(€385.8 billion) and grants (€338 billion) and are delivered depending on population, GDP per
capita (Maximum volume of the loan for each Member State of up to 4.7%) and unemployment
rate. These funds are directed to EU countries to afford reforms to be implemented by end-2026.
Every state had submitted for approval its Recovery and Resilience Plan to the EU Commission and
Council that have consequently evaluated the compliance with the standards and the criteria
imposed by the EU. There are country-specific recommendations, plus green and digital-oriented
requirements. The six pillars identified by the Commission are:

1. Green Transition: involves clean transport, facilities renovations, clean energy and circular
economy;

2. Digital Transformation: amplifies connectivity, digital research and development and e-


government;

3. Smart, sustainable and inclusive growth: is related to business and enterprises, it aims at
increasing the competition of EU firms and promoting private investments;

4. Social and territorial cohesion: foster the creation of a social economy, focusing on
education, gender equality, youth employment and pensions;

20
5. Health, economic, and institutional resilience: brings sustainability of the public sphere,
investing in health infrastructure, preventing macroeconomic imbalances and optimising public
administration, including justice;

6. Policies for the next generation: addresses youth unemployment, early school leaving, child
poverty and care, with a focus on accessibility, affordability, quality and inclusiveness (European
Commission, 2021).

Even in this case, Technical Support Instrument has been arranged in order to help Member States
to properly and consistently make use of the money. Moreover, a Recovery and Resilience Task
Force must control how plans are implemented and report to Commission President Ursula von
der Leyen.

5.3 GENERAL DIRECTION BUT PARTICULAR SOLUTIONS

Mainly, the NextGenerationEU doesn’t demarcate any straight line, it sets up values and puts on
some requirements but leaves much room for manoeuvre, letting states and enterprises to
achieve the goals in their own way. The general direction is strongly determined by treaties (like
the Great New Deal), where intents are identified and made clear. Once the priorities are set up,
all agents are free to find their particular and innovative solution.

Both the Just Transition Fund and the Recovery and Resilience Facility require certain standards to
be met but the solution is not standardised. This policy toward problem-solving is very profitable.
First, it takes advantage of territorial peculiarity: it allows the use of local natural resources that
are not available elsewhere, the industrial and geographical conformation is different from place
to place and the social fabric can better adapt. This fosters circular economies, where waste is
reused and absorbed within the productive circle working together as a unitary machine. Plus, this
develops an organic and connected net where mutual help is essential for improvement.
Cooperation became the new password for survival, when it was competition. Additionally,
creativity and variety is amplified. Starting from different standpoints, every solution that emerges
is unique: it has available specific tools, skills and methods to address specific problems. Finally,
local activities generate a sense of belonging and desire to participate. Neighbouring people easily
feel interest and involvement and take active part. The overall approach respects social necessity:
it creates bonds built on team working and well-being.

5.4 POST-GROWTH VS GREEN GROWTH

As I have highlighted in the second chapter, the best way to approach climate change is reaching a
new form of economy that is decoupled by growth, where a steady state is reached and economic
competition and accumulation is slowed down and limited. Laurent has identified a theoretical
trilemma (impossible trinity) that characterises the 21st century: as he points out how it is
impossible to reach at the same time GDP growth, welfare state and ecological transition (Laurent,
2021) (Figure.1). In the Social democracy of the post-war, the environmental matter wasn’t taken
into consideration while the welfare state was financed by a strong economic growth. On the
other hand environmental protection cannot be paired with the high increase of GDP insofar as

21
the economic growth implies natural degradation and it follows that this ‘gradually renders
welfare states financially unsustainable because of the resulting human health degradation: the
welfare state is destabilised’ (Laurent, 2021).

Source: Eloi Laurent (2021), ‘From welfare to farewell: the European social-ecological state beyond economic growth’, ETUI aisbl,
Brussels

I will not directly address this strong trichotomy, where each model is incompatible with the other.
However, I think it is useful to conserve the separation between a green growth and post- growth,
for which the down-sizing of consumption is an inherent and unneglectable feature. The EU
solutions can be more easily identified with a green growth approach. The intent of the
Commission is to mitigate the economic and social impact of Covid-19 and if possible to improve
its growth while getting more digital, competitive and green.

From the environmental point of view, one major flaw is that the EU askes for more efficient use
of energy, greener food and goods, innovation and new productive technology but it doesn’t
provide an intensive and inter-sector decommodification of the economy. Converting the
consumers’ behaviours is considered as a matter of quality rather than quantity. The Horizon
Europe and Recovery and Resilience Facility are packages oriented toward innovation-led growth
following green imperatives; this implies little interest in diminishing consumption. The Just
Transition Fund is an economic incentive to revolutionise the industry but it only takes into
consideration enterprises and the productive sphere. High quality standards are required, green
certifications and labels are implemented: this puts a higher burden on producers that must
comply with new qualifications, while consumers are free to enjoy high consumption levels and
are not asked to concretely and actively modify their behaviours. Green conversion and
certifications are expenses for the producers that are translated to the cost of the final good, if the
consumer cannot perceive the intrinsic value of an eco-friendly commodity, he/she is not willing
to pay more and could probably opt for cheaper, imported products. This top-down approach is
partial, because it doesn’t address market and behavioural transformation, and paternalistic,

22
because it imposes a change rather than educating the population toward moderate consumption
and saving.

On the other hand, the Just Transition Fund focuses on the creation of new green and digital jobs.
The positive power of education is undeniable: research and training infuse eco-friendly skills as
much as new behaviours and life-styles. Because the learning process requires creativity and
active involvement, this can foster the creation of a new generation of citizens that follows good
environmental values and actively works for a better ecological system. The deriving
transformation is much more rooted in the every-day life, bringing consciousness. However, to
move away from the present consumerist economy it is necessary to rethink the employment
policy. It is not enough to generate new jobs, it is important to cut the amount of time spent at
work and to implement unpaid activities. This transformation has an ambivalent positive impact:
on the environment, reducing consumption and, on the welfare, involving a greater proportion of
the population in the working force, taking many job-seekers out of poverty. If we add the training
and upskilling of workers, we will obtain a specialised and inclusive labour force.

Ultimately, the NextGenerationEU packages reflect an attempt to solve both welfare and
environmental necessities, but its main goal is to accelerate recovery with an increase of economic
activity. Many post-growth pillars are disregarded and this entails a smoother transformational
influence. Greater attention has been paid to renovate enterprises and the labour force than to
help the poorest and diminishing disparities. Mobility plan and housing and food reforms are not
directly addressed by any of the NextGenerationEU package, it could have been more profitable if
a collective effort was established. These were commitments cited in the European Green Deal,
but the fulfilment of these reforms is left to individual states by using money from Recovery and
Resilience Plans as wisely as they can. These plans have a huge social impact, because increase
general well-being and are progressive policies. Circular economy and improvements in the
productive processes are important, but they only helps the wealthier to adapt and convert.
Welfare values were not fully satisfied and this is the second and more serious flaw.

In conclusion, was the Covid-19 a cost or a new opportunity for a just transition? The pandemic
was able to mobilise a great amount of minds and money in eco-social activities. The EU has
shown involvement in the environmental cause and was able to balance out opposite opinions and
necessities, there were a close attention to health (EU4health), gender equality and educational
plans. If we keep in mind that it is a political organisation, where different leaderships, interests
and economies are put into play, the obtained result is a good compromise; however these funds
respect more value inherent to the green growth theory. The great majority of subsidies and
economic incentives are used to train the labour force and ameliorate the productive techniques
only. There is not any particular distributional efforts: social policies and well-being are taken
lightly and underestimate. The same can be said about consumer awareness. In order to achieve a
deep and effective transition (able to reconcile social and ecological needs), much more should be
done. If we consider that EU population account for only 447.7 million out of 7.95 billion people in
the world, it is evident that we are far behind achieving the UN 17 Sustainable Development
Goals.

23
CHAPTER 6

CONCLUSION
Is it possible to conciliate these two objectives: environmental protection and social equity? Which
are the features the welfare system must leave behind? I have tried to answer these questions
throughout this essay discussing Just transition. Just transition is needed to start now to ensure
that the world moves toward a climate limitation of 1.5°C. Without strong action now, the future
of climate action will be endangered and the more we wait the harder it gets to stop global
warming. This analysis has collected a series of guidelines aimed at helping policymakers, workers,
employers and households make informed decisions about the transition. The welfare states and
the economic systems are required to shift to a welfare-eco state. The current confluence of
economic crisis and hazardous climate change asks for integration, coordinating social movements
to pursue permanent solutions. The history of welfare states shows that drastic reforms are most
successful and long-lasting when elite self-interest is joined with mobilisation and pressure from
below.

The purpose of this paper was to investigate whether and how environmental taxation,
investments and education would have the ability to ameliorate the disparities in outcomes now
faced by different socioeconomic groups as a result of environmental deterioration. This study has
demonstrated that just environmental policies are cost-effective tools that can raise
environmental standards and lessen the negative health and wealth effects of pollution. These can
thereby help the environment while simultaneously achieving social equality and tax justice goals.

Many of the fundamental concerns regarding the true nature of the economy and of human
existence that were started long before the Covid-19 pandemic and have been reopened by this
world-wide crisis. For this reason we have taken into consideration recent EU policies aimed at just
transitioning our economy and society. The reality is that the current social and environmental
emergency is compelling our governments to act immediately to save their citizens, especially the
most defenceless. The idea of essential well-being can be used by the EU leaderships to guide
social and environmental efforts. It is also important to take responsibility for the degradation that
the Western World has provoked throughout modern history and to advise developing nations on
the implementation of sound policies.

Moreover, policymakers should start developing long-term strategies able to deal with the
emergence of economic and social changes consequent to a green transition. Building on this
strategy will address major social issues, like rise of unemployment and economic inequalities.
Climate change has increased the demand for social measures, creating new demands for
environmental and distributional expenditures and regulation. Even if green development can
generate additional income to support these new policy demands, this altered landscape would
force significant changes on the existing welfare states.

Integrated policies can assist nations in fulfilling their obligations under international
environmental agreements like the Paris Agreement and EU Green Deal as well as the 2030

24
Agenda's sustainable development goals, which call for higher social and economic standards and
emphasise the mobilisation of development resources. All countries in the world should strive to
internalise the cost of pollution by the imposition of a local and, later, a worldwide environmental
agenda. The time has come to establish the benchmarks against pollution and economic
disparities which success will be measured during the next ten years and more.

25
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