2. The non-neutrality of the green transition

The green transition is far from a neutral policy initiative. While it is argued that the long-term benefits of reconversion outweigh its short-term costs,Footnote ² this perspective must not obscure the immediate conflicts it generates. As Latour and Shultz observe, ‘Talking about nature doesn’t mean signing a peace treaty; it means recognizing the existence of a whole host of conflicts on all possible subjects involving everyday existence, at all scales and on all continents’.Footnote ³ Environmental protection is inherently divisive because of its redistributive implications.

The green transition exacerbates conflicts among individuals and, moreover, among groups on opposite sides of the economic and social trade-offs it presents. While the long-term benefits of reconversion are imagined as universal, the short-term costs are unevenly distributed. Accordingly, reconversion policies should be evaluated through a comprehensive cost-benefit analysis that assesses not only economic issues but also social impacts, by considering non-market factors like social equity. This approach implies that sustainability does not hold an intrinsic value per se, but must be evaluated in terms of impacts on the socio-economic system.Footnote ⁴

The green reconversion process generates winners and losers, and these polarities underscore the need for a transition that incorporates compensatory mechanisms to address the burdens borne by specific groups. For this reason, many scholars regard social justice, its principles and logic, as an integral part of sustainability.Footnote ⁵

Green transition policies should be assessed for their economic efficiency and for their distributive justice, examining how benefits, costs, and responsibilities are allocated across different social groups. This approach ensures that the sharing of resources and burdens does not disadvantage vulnerable populations and supports a more equitable and socially sustainable transition.Footnote ⁶

In order to evaluate these distributive implications, two distinct (but complementary) analytical frameworks can be employed. First, a geopolitical framework to assess how the burdens and benefits of the green transition are distributed across different countries or regions,Footnote ⁷ considering global power asymmetries and intra-EU disparities. Second, a socio-economic framework to focus on how specific social groups, within and across Member States, are affected by the transition, especially in terms of vulnerability, access to resources, and exposure to environmental or economic risks.

At the geopolitical level, the European Union promotes a just and inclusive transition Footnote ⁸ through mechanisms such as the Just Transition Mechanism, which provides targeted compensation to Member States most affected by the migration away from carbon-intensive industries. To implement the Just Transition Mechanism, Regulation (EU) 2021/1056Footnote ⁹ established the Just Transition Fund, which provides economic resources totaling €19.2 billion over 2021–27 to support national economies committed to climate neutrality by 2050 and compliance with related EU regulations.

From a socio-economic standpoint, however, the EU’s response to the social costs of the transition remains insufficient. Industrial reconversion can lead to job losses, higher energy costs, and disruption to communities, particularly those reliant on carbon-based industries.Footnote ¹⁰ Moreover, decarbonisation policies risk amplifying pre-existing inequalities, including gender disparities. For example, urban mobility reforms, such as consolidating public transport routes or prioritising cycling infrastructure, can unintentionally disadvantage women, many of whom rely on complex multi-stop travel linked to their caregiving and household responsibilities.Footnote ¹¹ Without inclusive design, sustainability policies may unintentionally limit accessibility for those most dependent on public infrastructure.Footnote ¹²

The European Green Deal makes merely six references to the inequalities that could result from the green transition, all of which are vaguely worded. Moreover, the EU Commission’s regulatory approach favors economic efficiency over social well-being. The Social Climate Fund, created under Regulation (EU) 2023/955,Footnote ¹³ seeks to mitigate these issues by financing investments and direct support for vulnerable groups.Footnote ¹⁴ Despite this, its budget – €86.7 billion over six years – raises concerns about its adequacy to provide meaningful compensation.Footnote ¹⁵

Therefore, while green transition is often framed as a universal good, it ushers in deep social and geopolitical inequalities. A truly sustainable green transition requires not only environmental and economic considerations, but also a strong commitment to distributive justice.Footnote ¹⁶

Through integrated geopolitical and socio-economic frameworks, and with robust compensatory mechanisms like the Just Transition Fund and Social Climate Fund, the EU has laid foundational tools – yet their effectiveness will depend on prioritising equity and reinforcing support for the most affected groups.

These distributive dynamics are manifest within the urban context, where the green transition is most immediately enacted and experienced. Housing and urban planning emerge as critical domains in which environmental objectives intersect with complex social realities, often resulting in the reproduction or exacerbation of inequalities. As cities implement climate mitigation and adaptation strategies (such as energy-efficient building retrofits, green infrastructure, and sustainable mobility systems), these spatial and social impacts warrant scrutiny: access to affordable housing, equitable distribution of environmental benefits, and risks of displacement or exclusion faced by vulnerable populations. The following section examines these issues by analysing the ways in which urban planning contributes to, or mitigates, the emergence of green inequities across different social groups and territories.

3. Housing, urban planning, and green inequities

One area of reconversion policies where green transition conflicts with social justice is that of regulating real estate ownership and urban planning. Energy upgrades to existing buildings and urban greening and re-naturing projects can give rise to enormous economic and social disparities. As regards policies that seek to reduce greenhouse gas emissions produced by low energy efficiency buildings and the construction sector in particular, there is palpable conflict between the collective interest in combating climate crisis and the right to housing.

There are several ways to shrink buildings’ energy footprint, ranging from improving their energy performance to choosing more sustainable construction materials. Precisely in order to field a broad spectrum of measures, the European Union adopted Directive (EU) 2024/1275 on the energy performance of buildings (EPBD),Footnote ¹⁷ the revised Energy Efficiency Directive (EU) 2023/1791 (EED),Footnote ¹⁸ and Regulation (EU) 2024/1781 establishing a framework for the setting of eco-design requirements for sustainable products (ESPR).Footnote ¹⁹ This package will be completed by the forthcoming revision of Regulations 2019/1020Footnote ²⁰ and 305/2011 on construction products (CPR).Footnote ²¹

The EPBD and EED require structural interventions to improve buildings’ energy performance, thus reducing their energy demand. These directives feature significant potential, given that most buildings in the European Union were constructed before 1980, with approximately 97 per cent requiring improved energy efficiency to achieve the EU’s climate neutrality target by 2050.Footnote ²²

Since these measures impose obligations on property owners to climate-proof their buildings,Footnote ²³ they can result in significant disparities, given the many tradeoffs between climate change and housing issues. Generally speaking, low-income householders own low-quality buildings that need immediate work in order to comply with the new regulatory framework. Moreover, in all cases where rental housing must be upgraded, renovations could lead to rent increases and become a key factor in owners’ decisions to put a building on the market in order to capitalise on its higher rents. In addition, upgrades can result in ‘green gentrification’Footnote ²⁴ and its downside, as higher property values and resulting prices reduce access to housing for economically vulnerable people, forcing some to move to other parts of the city.

As we have seen, efforts to increase buildings’ energy efficiency can heighten existing inequalities and create new ones, sparking regressive redistributive effects. In the near term, the costs of this portion of the green transition process will be passed onto people least able to bear them, most notably socially marginalised, racially discriminated groups such as migrants and large low-income families.

Energy upgrades present valuable opportunities for property owners to enhance the sustainability and efficiency of their buildings. However, without the support of tax incentives or other forms of public funding, these mandated improvements could lead to significant financial burdens and risks resulting from incurring debt. The green transition could become a contributing factor to an expansion of the debt society.Footnote ²⁵

These problems also arise with construction products, where a price increase due to compliance with green requirements – the so-called ‘green premium’ – could be triggered by new rules that essentially require that products be sustainable by default.

Similar inequities arise in the energy sector. Decarbonisation is likely to drive up energy prices, and since energy consumption tends to be highly inelastic – particularly among low-income householdsFootnote ²⁶ – some groups will be unable to reduce significantly their usage in response to rising costs. As a result, there is a heightened risk that energy bills will absorb a disproportionate share of low-income households’ income, increasing their exposure to energy poverty.

These considerations indicate that the largest problem in the green transition is posed not by climate change deniers – who are, after all, only a vocal minority of the public – but by the large number of losing parties in the reconversion process. If effective steps are not taken to prevent or mitigate the regressive effects, these groups could be saddled with a disproportionate share of the green transition’s costs.

4. Good faith and vulnerability in the green transition: toward a redistributive role for private law

As discussed above, implementation of green transition policies in the domains of real estate ownership and urban planning risks distributive conflicts, particularly when viewed through the lens of landlord–tenant relations. These clashes can disrupt contractual arrangements, altering the original conditions under which the parties entered into the agreement. For this reason, courts may be called upon to resolve the resulting conflicts and to determine how contracts should adapt to ecological transformation. Accordingly, general private law doctrines can serve as corrective instruments in cases where regulatory interventions are not feasible. Two hypothetical cases illustrate these dynamics:

Both (A) and (B) highlight conflicts concerning the allocation of resources and the distribution of positive and negative externalities.Footnote ²⁷ While public intervention (such as subsidies to support tenants or development of affordable housing) can offer essential assistance, private law has a critical role to play as well in achieving a more equitable (re)distribution of wealth.Footnote ²⁸ In particular, private law mechanisms can support forms of horizontal redistribution by affording enhanced protections to tenants in vulnerable positions. The use of general clauses, such as the principle of good faith, enables courts to resolve such disputes by fostering solidarity and embedding emerging interests within a framework of social justice. A caveat is in order: the set of tools and arguments presented here is not grounded in the assumption that landlords should categorically bear the full burden of the green transition. Rather, it emphasises that fairness should be assessed contextually, with reference to relative capacities and vulnerabilities. Good faith as a doctrinal tool allows courts to weigh factors such as access to subsidies, the relative wealth of the parties, and the social consequences of displacement. While this introduces a degree of indeterminacy, it also ensures that distributive burdens are not allocated in a rigid or regressive manner.

In case (A), although the rent increase may appear valid under the doctrine of freedom of contract, its legitimacy becomes questionable when evaluated through the lens of good faith.Footnote ²⁹ In this context, good faith encompasses not only adherence to formal legal norms but also a substantive duty of fairness and transparency in contractual relations. Where a rent increase disproportionately burdens a tenant – especially one with limited economic means – and where the landlord has already received public subsidies, the measure may be construed as opportunistic and inconsistent with the good faith obligation. The issue, then, is not one of formal unlawfulness, but of substantive unfairness: the landlord’s conduct may violate the spirit of cooperation and equity that should underpin contractual relationships. This interpretive approach allows both courts and legislators to interrogate the fairness of actions that, while legally permissible, subvert the balance of interests and produce unjust outcomes, particularly in the context of ecologically motivated transformations.

A similar analysis applies in case (B). While evictions following sustainability-driven redevelopment may find formal justification in property and contract law, they raise serious normative concerns when assessed from the vantage point of social justice. Ecological objectives, while important, should not be invoked to shield landlords and developers from scrutiny where their practices systematically marginalise disadvantaged populations. Accordingly, a landlord seeking to evict tenants after accessing public subsidies or tax incentives for green upgrades, without offering reasonable alternatives or transitional arrangements, may be acting contrary to the expectations of loyalty, transparency, and proportionality that good faith demands.

Case (B) also underscores the importance of recognising vulnerability as a distinct legal category that can inform more equitable outcomes. Here, the concept of vulnerability moves beyond the traditional notion of the ‘weaker party’, as articulated in EU consumer law. It encompasses both information asymmetry and structural inequalities, such as economic marginalisation, social precarity, and systemic disadvantage. The green transition exposes the limitations of relying solely on formal or intrinsic criteria to identify disadvantaged parties, and demands an approach attentive to situational and intersectional factors. This reconceptualisation has found resonance in legal scholarship addressing digital markets, where platform-based transactions reveal the need for a more context-sensitive accounting for consumer weakness – one that may include characteristics such as age, education level, or digital literacy.Footnote ³⁰

In parallel, recent EU regulations concerning energy efficiency and sustainability have introduced the notion of ‘vulnerable households’, defined as those experiencing energy poverty or in lower income brackets, who are disproportionately burdened by rising energy costs and lack the means to invest in property upgrades. These developments highlight the inadequacy of the traditional persona of the ‘average consumer’ – typically conceptualised as a ‘reasonably well-informed, reasonably observant and circumspect’ actorFootnote ³¹ – and instead affirm the relevance of vulnerability, which recognises differentiated capacities and social conditions. Unlike the idealised, abstract consumer, the vulnerable party is understood in context, shaped by concrete socio-economic and individual constraints that impede the ability to participate on equal terms in market transactions.

In this light, invoking vulnerability as a legal concept justifies the adoption of differentiated protections for affected individuals and communities. It enables private law to respond to both environmental imperatives and imperatives of social justice.

The proposal to anchor legal analysis in the principle of good faith and in consideration of the lived experience of vulnerable populations reaffirms the critical role of legal remedies, collective actions, and the judiciary. The courtroom is thus reimagined not solely as a neutral forum for dispute resolution but as a space for political and social reconstitution, in which class (in Marxian termsFootnote ³² ) can be rearticulated through processes of mutual recognition and shared struggle.Footnote ³³ While this perspective raises legitimate concerns about the democratic legitimacy and impartiality of courts,Footnote ³⁴ it is precisely the judiciary’s capacity to mediate between abstract legal norms and concrete social realities that legitimises its role. Courts are uniquely situated to integrate contextual nuance into legal reasoning, enabling a more inclusive, responsive, and justice-oriented application of law.Footnote ³⁵

5. Toward an ecological private law

The above analysis has emphasised good faith in contractual relations and vulnerability as legal tools for managing the externalities and distributive conflicts generated by the green transition. These concepts provide mechanisms within private law to address imbalances that arise in the transformation of housing markets and urban spaces, particularly where public incentives intersect with private interests. Beyond this specific doctrinal inquiry, however, lies a broader and more basic question: what role should private law embrace in this new socio-ecological and institutional context?

The first consideration is that general principles and original legal concepts are essential for navigating a phase in which EU intervention extends beyond the construction of regulated markets, and begins to affect domains such as housing and urban planning, which have traditionally fallen within the purview of national governments and local authorities. General principles are particularly well-suited to manage conflicts in these newly integrated fields, since they provide flexible tools that can be interpreted and applied by national courts to reconcile competing interests and legal traditions.

At the same time, the renewed emphasis on general principles reveals structural inadequacies of traditional private law in responding to the demands of a model that seeks to account for ecological boundaries and sustainability imperatives. Historically, during the era of national codifications, private law evolved in tandem with capitalism, introducing limits to private autonomy and economic freedom in response to social constraints. The pressing question today, in the context of the green transition, is how such limits might also serve ecological and environmental goals.

Framing this evolution merely in terms of new constraints on autonomy and market freedom, however, overlooks the potential for private law not only to restrain but also to enable: to promote new forms of cooperation, solidarity, and innovation that align with ecological sustainability. The challenge is not simply to impose limits, but to reimagine private law as a generative framework, capable of supporting a just transition by embedding environmental responsibility and social equity into the fabric of private relationships.

This interpretative challenge is being taken up by a wide range of legal scholars who adopt various labels to characterise their innovative approaches to private law: terms such as transformative,Footnote ³⁶ prefigurative,Footnote ³⁷ or ecologicalFootnote ³⁸ are invoked. Despite their differing methodologies, these scholars share a common goal: to reimagine the foundations of private law by disrupting the self-reinforcing cycle wherein law enables extractive practices, and extractive logics, in turn, shape legal institutions. What is at stake is nothing less than a paradigm shift, one that reorients private law toward ecological responsibility and social sustainability.

Consider the domain of property law. The exclusionary powers traditionally associated with ownership – the so-called ‘bundle of sticks’Footnote ³⁹ – must be interpreted with nuance. When exercised for extractive or anti-social purposes, such as to block access to land that could be used for communal or ecologically regenerative activities, these powers should be narrowly construed. On the other hand, when exclusion serves to protect ecological values, as in the case of an owner who acquires land to litigate a destructive infrastructure project, a broader, purposive interpretation of proprietary rights becomes necessary. This teleological approach frees up space for interpreting ownership not merely as dominion but as stewardship.

A similar interpretative recalibration is needed in contract law. While doctrinal orthodoxy maintains that motives are legally irrelevant, this stance has long served to privilege exchange value over more stable and sustainable forms of use value.Footnote ⁴⁰ In contrast, a more context-sensitive interpretation, one that acknowledges the environmental and social consequences of private agreements, could allow courts to deny enforcement of contracts that produce disproportionate harm to third parties, including future generations.Footnote ⁴¹ Expanding the reach of doctrines such as unfairness, public policy, or immorality would render contract law less complicit in ecologically harmful market dynamics. Similarly, reworking foundational concepts such as fault, care, good faith, and reasonableness in line with precautionary principles would help assign the burden of proof justly in contexts of environmental risk.

Ultimately, this approach offers a viable pathway to realign the green transition with principles of social justice, addressing questions of not only allocation but also redistribution. It signals a reconfigured private law, no longer a facilitator of market transactions but rather a hands-on participant in shaping a sustainable and equitable social order. Such a theory invites critical reflection on the normative architecture of private law, and it contributes to the righteous project of designing institutions for a fair ecological future.