Study warns of the uneven impact of climate policies in the EU
The research, led by the Basque Centre for Climate Change (BC3), shows that national strategies and plans place less pressure on low-income households and ensure a fairer transition than EU-wide policies of a general nature, such as a single carbon price.
The model combines macroeconomic data with an analysis of 200,000 European households, revealing greater vulnerability in rural areas and an indirect gender gap.
The European Union’s decarbonisation policies risk generating deep social inequalities if they are designed solely on the basis of minimising economic costs. This is the conclusion of a new study led by the Basque Centre for Climate Change (BC3), which finds that the most macroeconomically efficient climate measures have a disproportionately negative impact on lower-income households, rural areas and Eastern European countries.
The study, published in the scientific journal npj Climate Action, provides a detailed analysis of the distributional impact of key European regulations and initiatives, such as the Fit for 55 package and the National Energy and Climate Plans (NECPs).
To overcome the limitations of previous studies, which have often failed to account for income or gender inequalities, the team led by BC3 researcher Eva Alonso-Epelde has developed a pioneering methodology.
The study incorporates representative data from around 200,000 European households and assesses the impact on economic well-being based on four scenarios agreed upon with experts from organisations such as the European Commission’s Joint Research Centre, Bruegel and Carbon Market Watch.
The results show that opting for a single carbon market — the most efficient scenario, with an overall impact of -5.14% on well-being — is regressive. This approach concentrates the greatest economic losses in Central and Eastern European countries, particularly affecting lower-middle-income households.
Rural vulnerability and the gender gap
In addition, the analysis at the intra-national level reveals complex realities. Although middle- and high-income households experience greater percentage losses resulting from private fuel expenditure, the most vulnerable populations face the most severe consequences when energy prices rise.
On the one hand, households living in low-density areas, such as rural regions, are the most adversely affected in all scenarios due to their heavy reliance on private vehicles and the lack of public transport alternatives.
On the other hand, although male-headed households experience a greater direct impact from car use, higher transport costs indirectly exacerbate mobility barriers and access to employment for low-income women.
The value of national plans
In contrast to single-price policies, the research highlights the corrective role of national plans (NECPs). Although this scenario is less efficient from a macroeconomic perspective, with an impact of -6.5% on overall well-being, it is less regressive because it takes regional capacities into account and provides greater protection for lower-income groups across Europe.
“Our study provides scientific evidence to strategically target EU decarbonisation tools. It is also necessary to prioritise direct transfers to mitigate energy poverty, increase investment in public transport with a gender perspective, and establish clean mobility subsidies in rural areas,” concludes Eva Alonso-Epelde.
