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Making the ETS 2 and Social Climate Fund Work

Guidance for National Policymakers

Making the ETS 2 and Social Climate Fund Work

The framework of the ETS 2, together with its obligations for revenue recycling and the specific role of the Social Climate Fund, follows current international good practice.

  • On its own, the carbon price may exacerbate energy and transport poverty. Hence the need for the Social Climate Fund and other revenue use.
  • Impacts are different in each Member State, so the response strategies should be tailored.
  • A key objective is to empower vulnerable groups to reduce their dependence on fossil fuels.

For the Social Climate Fund to be a success, it must be implemented well. Each Member State now needs to develop a national Social Climate Plan. This challenge has three key steps:

STEP 1. ASSESS NATIONAL VULNERABILITY PATTERNS

  • Select and define a set of vulnerability indicators
  • Use already available national-level data
  • Work to improve data sources and indicators

STEP 2. DESIGN A SET OF POLICY MEASURES

  • Integrate local-level data, indicators, and delivery channels
  • Start simple and improve accuracy over time
  • Build on good-practice examples
  • Take a holistic approach to policy design

STEP 3. STAKEHOLDER ENGAGEMENT

  • Stakeholder consultation should start early
  • Actively engage municipalities
  • Hold regular meetings with stakeholders
  • Develop a communication strategy
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