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The transition towards climate neutrality represents a profound societal transformation that affects different segments of society in unequal ways and imply the adoption of just transition policies. While the urgency of achieving net zero emissions is clear, the pathway to decarbonisation produces varied impacts across regions, communities, and social groups.

The concept of an inclusive climate transition captures this reality by recognising that both the impacts of  climate change and the effects of mitigation policies are unevenly distributed. Approaching climate policy through the lens of equity means addressing multiple dimensions of inequality, vulnerability, and opportunity. The goal extends beyond environmental outcomes to encompass social inclusion and the fair distribution of costs and benefits throughout the transformation process.

The SPES project recognises that rising inequalities, persistent multidimensional poverty, and climate change represent alarming trends facing societies today, often attributed to policy decisions that focus too narrowly on GDP growth as the only measure of prosperity. Among others, SPES research focuses on identifying socioeconomic and demographic groups vulnerable to shocks directly and indirectly linked to climate change, including impacts from increasing energy prices. SPES research in this area employs empirical analysis to map vulnerabilities and inform policy approaches that ensure the sustainability transition does not disproportionately burden vulnerable populations. According to the evidence, patterns of vulnerability manifest both across regions (e.g., the North–South divide)  and within regions (unequal distribution across socioeconomic groups), requiring multi-level responses.

Policy Recommendations

1.Develop Comprehensive, Multi-Instrument Policy Packages.

Isolated policy interventions fail to address the complex, multidimensional nature of energy poverty and climate transition challenges. Evidence shows that combining decarbonization policies with high subsidy rates and targeted support reduces both consumption and poverty. During recent energy crises, strategies that combined price measures with household transfers proved more effective than transfers alone. National examples such as Spain’s multi-category approach successfully combined immediate relief with structural  improvements, while others coordinated energy efficiency support with landlord–tenant agreements. In contrast, minimal approaches limited to basic financial aid without consumer protections failed to address multidimensional vulnerability. To make such comprehensive packages effective, their design must ensure that short-term relief measures are consistently linked with long-term structural reforms. This requires coordination across sectors—such as housing, energy, transport, and social protection—so that interventions are not delivered in isolation but as part of an integrated strategy. Concrete options include combining income protection with investments in renewable energy communities and sustainable public transport grids, which simultaneously reduce costs, cut emissions, and expand equitable access.

2. Prioritise Strategic Targeting of Vulnerable Populations.

Evidence suggest, that focused interventions deliver superior distributional results compared to universal approaches. Portugal’s targeted strategy concentrated most efficiency measures on vulnerable consumers. At the same time, increases in social protection expenditure have been shown to reduce energy poverty and remain resilient during crises. Carbon tax revenue recycling through tax cuts and rebates has improved consumption shares for lower-income households. Research shows that lump-sum transfers work better for lower incomes, while tax reductions—especially labour taxes— benefit higher incomes, while tax reductions benefit higher incomes. By contrast, universal subsidies and across-the-board tax cuts often fail to benefit those most in need. In practice, this requires establishing clear and transparent criteria that allow support to be directed precisely to those most affected. Instead of dispersing resources through broad, universal measures, policy design should be guided by indicators of vulnerability that combine social, territorial, and energy-use dimensions. It is crucial to distinguish between universal entitlements, such as social protection systems, which are accessible to all but progressive in their redistributive effect, and untargeted subsidies like across-the-board price cuts, which tend to be regressive. Embedding these criteria in both the planning and delivery of programs certify that assistance reaches the households most in need, enhancing both effectiveness and fairness.

3. Address Multiple Dimensions of Inequality.

Policy impacts extend far beyond income to encompass skill-based, geographic, gender, and demographic inequalities. Energy price increases have been shown to reduce female employment rates while leaving male employment unaffected, driven by occupational segregation and lower geographic mobility. Climate policies have tended to favor technicians while
disadvantaging manual workers. Rural households have faced disproportionate burdens from carbon pricing compared to urban populations. Implementing this recommendation requires systematically assessing how policies affect different groups before they are enacted. This involves conducting distributional analyses that consider gender, geography, occupation, and household structure, and then adapting measures to mitigate identified inequalities. Examples include tailoring eligibility rules, introducing compensatory mechanisms, or linking climate measures with labour market support. Transparent reporting of these differentiated impacts is essential to maintain public legitimacy and to ensure that the transition is perceived as equitable rather than exclusionary.

4.Address Structural Misalignments.

Effective policy implementation requires identifying and addressing fundamental structural misalignments that prevent vulnerable populations from accessing support. National experiences show that coordination failures between agencies, definitional mismatches across regulations, misaligned incentives between property owners and tenants, and fragmented territorial governance have all undermined policy effectiveness. Addressing these misalignments requires establishing mechanisms that enforce coordination across actors and governance levels. Clear and consistent definitions must be developed to prevent gaps in coverage, while frameworks should be designed to align the incentives of tenants and providers. Harmonising rules across territories is also essential to avoid fragmented outcomes where access to benefits depends on location. Importantly, overcoming institutional barriers is key to scaling renewable energy communities and sustainable public transport grids, ensuring that such innovations are not confined to advantaged regions. Energy  communities in particular exemplify how democratizing access to clean energy can reduce costs for vulnerable households while addressing entrenched asymmetries of power between consumers and large providers. Embedding accountability and conflict-resolution mechanisms from the outset ensures that well-intentioned policies translate into tangible improvements for those they are meant to reach.

These Policy Recommendations are part of the fifth Policy Brief delivered by the SPES Consortium