Socially just transition in the Green Deal: cost of inaction

The study assesses how a prospective EU Just Transition Directive (JTD) could shape the social and employment outcomes of the European Green Deal. Drawing on literature review, stake-holder interviews, foresight-based PESTEL scenario building and partial-equilibrium projections, it develops business-as-usual, as well as weak and strong JTD scenarios to 2045. The scenarios focus on seven Member States representing diverse welfare and production regimes. In the base-line scenario, decarbonisation proceeds but skills shortages, regional disparities and pockets of poverty and exclusion persist or widen. A strong policy scenario, in which economy-wide JTD mandates anticipatory transition planning and provides a statutory right to paid training leave, modestly improves aggregate employment, inequality and poverty indicators, while substantially reducing local dislocation in structurally weak regions. In the weak policy scenario, narrowly scoped measures deliver only limited and localised gains. Because EU economies are tightly integrated, improving transition management in lower-performing countries yields positive spill-overs for growth, cohesion and the political sustainability of climate policy.