Terms
Terms
Terminology
Building blocks are the economic sectors, such as energy, transport or industry, and cross-cutting areas, such as finance, innovation, and lifestyles, in which transformation is needed to achieve a climate neutral society by 2050, and across which ECNO tracks progress.
Building block assessment
Acceleration factor
Or the ‘required change in speed’ is the ratio of the required change versus the past change on a given indicator. This results in the example formulation: ‘We need to increase our annual emission reductions to at least 4.9 Mt CO2e per year – or 2.6 times faster than the 1.9 MtCO2e per year achieved in the past’.
Benchmarks
Future reference points against which progress for each indicator is compared. ECNO derives benchmarks from official EU sources, such as directives, regulations, strategies, and action plans, including their related impact assessments. Benchmarks often come in the form of quantified policy goals or targets.
Climate neutrality
Stands for the objective of achieving net zero greenhouse gas (GHG) emissions. This means that emissions are brought down as close to zero as possible, with remaining, difficult to abate emissions balanced by GHG removals within a given country or region.
Enablers
The supporting conditions and underlying changes needed to meet the objectives in a given building block. They are the opposite of barriers or inhibitors.
Historical data
Includes, but is not limited to, statistics from Member States harmonised and provided by Eurostat or the European Environment Agency (EEA) as well as from international organisations such as the OECD, FAO, or World Bank.
Indicators
Track the historical development and status of enablers and objectives based on quantitative data. An assessment of indicator progress compares the trend against the required development to meet a future reference point, where data and relevant benchmarks are available.
Objectives
Describe what needs to be achieved in each building block to reach climate neutrality.
Required change
The change that underlies a pathway that meets the identified benchmark or target. Where benchmarks are missing, the required change indicates a direction and speed of change.
Trend
The development of an indicator over time based on historical data. ECNO’s trendline is a straight, best-fit line that smooths out the variation in historical developments based on all data points, providing a sense of the general progress over time.
Just and Inclusive Transition
A just and inclusive transition means that the timely shift towards a climate neutral economy will not come at the cost of vulnerable regions and social groups.
OVERVIEW:
Progress on the Just and Inclusive Transition has been too slow
Ensuring a just and inclusive transition involves a number of dimensions: from supporting the most vulnerable social groups, guaranteeing sustainable development for carbon-intensive regions, to creating new employment opportunities outside the fossil fuel industry. Many of these changes are beginning to take effect, but so far, they have been too slow to achieve the Just and Inclusive Transition. The distribution of Just Transition Fund resources, the launch of the Social Climate Fund and the creation of enabling conditions for increasing employment in the renewables and environmental goods and services sectors at a member state level will accelerate the process of just transition and reduce its negative effects.
INSIGHT TWO
Just Transition Fund moves to implementation phase
With almost all TJTPs accepted, the programming of JTF is almost over. In the next four years funds for carbon intensive regions will be distributed to support specific projects.
OBJECTIVES
Objectives describe what needs to be achieved in each building block to reach climate neutrality.
Objective 1
No regions left behind
Although fallen in absolute terms, in the recent years, the progress in reducing poverty and social exclusion in the European carbon-intensive regions was too slow to be in line with the 2030 target. The fossil fuel crisis and the acceleration of the transition may put this development at further risk in the near future.
Regional poverty rate
This indicator shows past development in the ‘At risk of poverty and social exclusion’ rate in 25 carbon-intensive regions. The benchmark for this objective is set by the European Pillar of Social Rights Action Plan.
The data show that the share of Europeans living in carbon-intensive regions who are at risk of poverty and social exclusion saw an annual decrease of 0.24%-points between 2017 and 2022. Past change was slightly too slow requiring at least 0.29%-points per year to deliver the required reduction of poverty and social exclusion by 2030.
Three separate measures are combined to calculate a number of ‘People at risk of poverty and social exclusion’. The indicator outlines the share of people with an equivalised disposable income (after social transfer) below the at-risk-of-poverty and social exclusion threshold, which is set at 60 % of the national median equivalised disposable income after social transfers, people suffering from severe material deprivation or people below 65 years old living in households with very low work intensity. Here it is given at NUTS 2 level which divides countries into regions with around 800,000 to 3 million inhabitants and compared to EU27 average.
We identify 25 carbon-intensive regions with available NUTS 2 level data in accordance with the list of European carbon-intensive regions developed by (OECD, 2023).
Objective 2
No one left behind
The ability of Europeans to keep their homes warm and pay associated bills, afford nutritious meals, or benefit from mobility options (e.g., by going on vacation) has improved in the years preceding the current fossil fuel crisis, and currently is on track to be in line with the 2030 target. This coincided with the period of economic growth picking up after the years of turbulence following the Great Recession of 2007-2009 and European debt crisis.
Average of four relevant sub-indicators in the material deprivation rate
This indicator shows past development in the four selected sub-indicators in the ‘Material deprivation’ rate. The benchmark for this objective is set by the European Pillar of Social Rights Action Plan.
The data show an average annual decrease of 0.5%-points between 2016 and 2021 which means that the indicator is on track to deliver on the poverty and social exclusion reduction target.
Material deprivation refers to a state of economic strain and durables, defined as the enforced inability (rather than the choice not to do so) to pay unexpected expenses and afford basic goods and services. Here, it consists of four sub-indicators related to climate transition: the inability a) to pay rent, mortgage, or utility bill, b) to keep their home adequately warm, c) to eat meat or proteins regularly, d) to go on holiday.
ENABLERS
Enablers are the supporting conditions and underlying changes needed to meet the objectives in a given building block. They are the opposite of barriers or inhibitors.
Enabler 1
Creating green jobs
Employment in renewable energy supply-chains
This indicator shows past development in the direct and indirect employment in all Renewable Energy Sources (RES) sectors.
The data show an annual increase of 1.3% between 2017 and 2021. As the RES industry is expected to be a predominant sector for green jobs creation, this development was heading in the right direction, but far too slow and should accelerate in the future.
This indicator refers to gross employment. It is an estimate of direct employment, such as RES manufacturing, plants construction, management, engineering, operation and maintenance, as well as indirect jobs in the supply chain, such as transport.
Employment in environmental goods and services
This indicator shows past development in the employment in environmental goods and services in two subcategories: Protection of ambient air and climate (CEPA 1) and Management of energy resources (CREMA 13).
The data show an annual increase of 3.7% between 2015 and 2020 which was going in the right direction but need to increase in speed.
The environmental goods and services sector (EGSS) accounts report on the economic sector that generates environmental products, i.e., goods and services produced for environmental protection or resource management. This calculation includes two subgroups within EGSS: CEPA 1 and CreMA 13.
Enabler 2
Regional Just Transition policies
Share of accepted Territorial Just Transition Plans
This indicator shows how many TJTPs were accepted by the EC, framing the Just Transition financing in regions.
The data show that roughly 96% of the Territorial Just Transition Plans were accepted by May 2023, with only three Bulgarian regions waiting for the final submission of their plans. Although the process should already be completed, it is now rated as on track with TJTPs delivery with the assumption that it will be finished this year at the latest.
This indicator shows the share of accepted Territorial Just Transition Plans in all submitted plans.
JTF progress implementation
This indicator shows the pipeline of the JTF. The benchmark for this indicator will be 100% funds allocated by 2027 (end of the 2021-2027 multiannual financial framework).
We expect JTF implementation data to be available in the future (as it is with the previous multi-year financial framework data) and provided by the European Cohesion Open Data platform.
This indicator shows the project pipeline for the Just Transition Fund. This includes resources allocated (decided) relative to the total amount available.
Enabler 3
Targeted support to vulnerable groups
Share of support for households
This indicator shows past development in the share of EU energy subsidies distributed to households. This a proxy indicator, that will be replaced by SCF distribution reporting once available.
The data show an annual increase of 1.2% between 2016 and 2021. This development was heading in the right direction but was far too slow and insufficiently to deliver on energy poverty reduction.
This indicator measures the share of energy subsidies that is distributed directly to households.
It is a proxy indicator and substitutes the future indicator on ‘Social Climate Fund’s targeted support distributed to low-income households’ which will show the total amount of funds distributed to low-income households. The SCF regulation defines ‘vulnerable households’ as households in energy poverty or households, including low income and lower middle-income ones, that are significantly affected by the price impacts of the inclusion of buildings into the scope of Directive 2003/87/EC (EU ETS Directive) and lack the means to renovate the building they occupy.
Share of support for energy efficiency purposes
This indicator shows past development in the share of EU energy subsidies distributed for energy efficiency purposes. This is a proxy indicator, that will be replaced by SCF distribution reporting once available.
The data show an annual increase of 3.5% between 2016 and 2021. This change was occurring below the required pace which makes energy efficiency subsidies yet too slow to achieve the goal of reducing energy poverty.
This indicator measures what share of energy subsidies is designated for energy efficiency.
It is a proxy indicator and substitutes the future indicator on ‘Social Climate Fund’s targeted support distributed to low-income households’ which will show the total amount of funds distributed to low-income households. The SCF regulation defines ‘vulnerable households’ as households in energy poverty or households, including low income and lower middle-income ones, that are significantly affected by the price impacts of the inclusion of buildings into the scope of Directive 2003/87/EC and lack the means to renovate the building they occupy.
report
State of EU progress to climate neutrality
The assessment of progress towards climate neutrality shows that the EU is moving in the right direction, but the pace is too slow. The transition to climate neutrality is essential for ensuring a liveable future.
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