Climate fund applications from the perspective of broad prosperity

Thema:: Energy transition pathways; Social innovation

As in the previous year, TNO provided a reflection in January at the request of the Ministry of Economic Affairs and Climate Policy (KGG) on the effects on broad prosperity of the applications for the Climate Fund in the draft Multi-Year Program 2026. The Ministry has taken this reflection into account in the final assessment of the applications.

TNO generally states that a large portion of the requested budget, 78%, is rejected. This is mainly because the funds from the Climate Fund have largely already been allocated, leaving little budget space. Regarding the allocated funds, TNO reflects that a large portion goes to large industrial consumers.

The allocation of funds thus seems to be primarily based on the principle of justice 'distribution based on greatest benefit' - with benefit defined in terms of achievable emission reduction.

Regarding the allocated funds for the sustainability of the built environment, TNO analyzes that these mainly benefit high-income households, which is at odds with an efficient allocation of resources and supporting the support for the energy transition.

TNO states that regarding the development of heat networks, it is necessary for politics to make a decision on ownership and cost structure of heat networks.

'An effective energy transition requires not only technological innovation but also social support. Therefore, it is essential to explicitly consider the distribution effects of policy.'

Marijke Menkveld

Senior Consultant

Adjustment of Assessment by Fund Manager

Following the TNO reflection, the fund manager has decided to reserve less budget for the ISDE and allocate that budget to the continuation of the heat fund. Together with budget from the Social Climate Fund, the heat fund can therefore continue to offer 0% loans to low-income households during 2026 and 2027.

The fund manager intends to seek independent advice again next year in the development of the multi-year program and to have experts reflect on the socio-economic consequences. For this MJP, a separate reflection specifically on the socio-economic consequences was requested from TNO for the second time. This has provided several useful insights that have been taken into account.

Broad Prosperity Guide in Development

To help ministries map out the broad prosperity effects of policy, TNO has been commissioned to develop a guide. This guide explains the various broad prosperity effects and provides tools on how to map them. The assessment of the results of such an analysis of the broad prosperity effects and the consideration of the impact on different areas is up to politics.

This guide can be used for designing and evaluating subsidizing, regulating, and pricing policies. In developing this guide, the planning agencies PBL, SCP, and CPB will provide input in an advisory role.