Social Climate Fund for Malta

This week, the European Parliament voted overwhelming on my report establishing the Social Climate Fund, a multi-billion euro fund geared toward energy efficiency measures for Malta and the rest of the EU. Its purpose will be to support households and micro-enterprises in the climate transition.

With the invasion of Ukraine by Russia, the discussion we were having about energy in the context of climate change now takes on a similarly pressing security dimension. While Europe battles more frequent and more intense heatwaves, we must also battle inflation in energy prices, among other goods.

In this unfortunate mix of crises, establishing the Social Climate Fund is a priority for our citizens. We are especially concerned with those who already struggle to make ends meet with energy. The Fund caters for support to those* with lower incomes who spend relatively more simply to heat and cool their homes or to fuel their car for essential travel.

In general, we wish to ensure that climate policies retain a social dimension. The European Parliament has now moved resolutely to begin investing billions toward achieving this.

For the past months, as co-rapporteur on the Social Climate Fund, I negotiated with political groups and MEPs from across the EU to ensure that the Fund attains the best possible impact.

Focussing our resources on better energy practices is the only way forward. From a climate change perspective, our emissions need to go down. The European Union’s flagship legislative package creates market-based solutions to reduce emissions in various industries. With households, the approach should be different.

Putting a tax on household emissions is not good social or climate policy. Neither is subsidising energy bills when that energy comes from fossil fuels. The best way forward is to direct resources from revenue-generating climate policies back to citizens.

We want investments to improve the energy efficiency of citizens’ houses and expand their options for low- and zero-emission travel, including public transport.

With subsidised access to solar panels, better insulation, heat pumps and other technology, households become more energy efficient, resulting in both lower emissions and lower energy bills. These investments target energy consumption from the demand side, resulting in less of a need for energy to be generated at the source. The reduced consumption will help the climate and citizens’ pockets, too.

On transport, the strategy of the Social Climate Fund is to invest in cleaner infrastructure to improve alternatives in mobility. One way of doing this is to help make public transport cheaper, greener and more efficient. With rising fuel costs, incentivising such mobility will help with both emissions and costs. Member states can also opt to invest in electric vehicles and the infrastructure to support it.

From the energy security perspective, reducing our use of fossil fuels is also a move toward energy autonomy and away from authoritarian regimes.

Ukraine is seeing the consequences of Europe’s reliance on fossil fuels. Even after sanctions were imposed, energy remains a weak spot, not least among those member states with a major dependence on Russian gas. As Europe remains a net importer of energy, the Social Climate Fund directs investments in the right direction.

While the Social Climate Fund will not precipitate geopolitical shifts, it informs the right direction that European governments should be taking to reform our economies in a way that benefits both the climate and preserves social wellbeing.

Yet the task at hand, in the preparation of my report, was to focus on those families who would benefit most from energy efficient renovations at home, who would not otherwise afford them. Our scope was to enable our communities to weather the effects of price hikes caused by climate change. The same Social Climate Fund will soon help cushion families from inflation caused by the war in Ukraine.

Malta may have the lowest road transport emissions, but as with our population, emissions are rising at the highest rates in Europe. Reducing emissions is a priority for the health of our communities, and in the fight against climate change.

Both the EU and national funds will be mobilised and administered by national governments. Our report ensures that local and regional governments and civil society are all involved in the process as well. As citizens are beneficiaries, the Fund is designed to benefit them and their communities.

Ultimately, what I hope to see with the Social Climate Fund is the involvement of innovative solutions at community level across Europe.

Fighting climate change is a priority, but we cannot ensure its success if we ignore the social dimension. While reducing energy demand on the road to the transition toward climate neutrality, the Social Climate Fund will be the EU’s best tool to keep society at the heart of our policies.