Can Europe's new Social Climate Fund protect poor from rising carbon cost?

(Context, 23 Dec 2022) A new EU fund to shield consumers from energy price spikes driven by climate change policies may not be enough to protect the poorest households, experts warn.

As the European Union prepares to extend controls on planet-heating carbon emissions to heating and transport, politicians are wary of the social unrest sparked in France in 2018 when the government hiked taxes on diesel, hitting consumers hard.

The "yellow vest" protests over the rising cost of living and perceived injustice of making ordinary people pay for climate measures forced a U-turn on policy - and were widely seen as a lesson in the need to make the green transition fair.

A new deal to overhaul the EU's carbon market from 2027 by cutting emissions faster and imposing new CO2 costs on buildings and road transport fuels also includes a fund to cushion the blow of higher prices for households and small businesses, and to help them invest in renovations and electric vehicles. 

Here's what you need to know about the Social Climate Fund:

Why is the EU setting up a Social Climate Fund?

First announced in July 2021, the fund was developed under negotiations to reform the EU's emissions trading scheme (ETS), which caps the carbon pollution of thousands of factories and power plants.

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Context, 23 Dec 2022: Can Europe's new Social Climate Fund protect poor from rising carbon cost?

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