Supporting the preparation of Territorial Just Transition Plans for Romania and the Czech Republic

This study conducted a regional impact analysis of just transitions in two Central and Eastern European countries: Romania and the Czech Republic.

Cambridge Econometrics provided social, economic, and environmental impact assessments of the transition to a climate-neutral economy for both countries. Using E3ME, Cambridge Econometric’s global macroeconomic model, job impacts were evaluated and then disaggregated to the most vulnerable NUTS regions.

The Project was implemented by Frankfurt School of Finance & Management (as part of the AARC Consortium) in  cooperation with Eurom, MKTB: Make Better and Cambridge Econometrics.

In response to the increasing policy need to assess the distributional effects of transitioning to a low-carbon economy, Cambridge Econometrics has developed a novel method to model local impacts, by disaggregating E3ME simulation results into regional (NUTS-2) estimates. This article introduces this novel method and shows how it was used to support the understanding of regional impacts of low-carbon transition in Romania and Czechia.

Based on this analysis, a prioritisation of regional investment was proposed to integrate climate change objectives into local development strategies. The countries’ Just Transition Plans could then take these recommendations into account at submission to the Commission.

Key findings:

• To reach their climate targets, countries need to reduce mines by either closing or replacing coal-based power plants and modernise or close carbon-intensive industries.
• The transition process to climate neutrality is expected to particularly effect communities with carbon-intensive industries, low-productivity, a risk of increasing unemployment, poverty and deepening the already high regional disparities between their regions.

Romania is one of those EU Member States who receive Technical Support for five coal regions: Hunedoara, Gorj, Galati, Mures and Prahova.

The Czech Republic is one of those EU Member States who receive Technical Support for the three coal regions : Ústí, Karlovy Vary and Moravia Silesia.