Rethinking climate targets for peripheral regions and islands

Why adaptation, fairness and realism must come before rigid targets

Juergen Attard

Climate change is already reshaping economies and societies, and its impact will intensify in the years ahead. In response, governments and international institutions have committed to ambitious climate neutrality targets. Achieving these goals, however, requires major policy shifts, substantial financial investment, and extensive changes in governance, and daily life.

Climate neutrality targets are now widely accepted as necessary. Yet their broader economic, social, and regional implications remain insufficiently analysed. This matters because the transition to sustainability must be not only environmentally effective, but also socially inclusive and territorially fair, especially for peripheral regions and islands.

Across Europe, regions and islands are increasingly encouraged, and at times indirectly pressured, to move towards climate neutrality faster than national averages, often under the pretext of acting as “test beds” for innovation. Ambition is welcome. But when this ambition is detached from local realities, it risks producing the opposite of what climate policy should deliver.

The transition, undoubtedly, offers opportunities: new jobs, new economic sectors, cleaner air, greener public spaces, and healthier environments. These benefits are tangible and should not be dismissed.

Fewer cars can improve environmental quality and social well-being. Cleaner air enhances quality of life. Greener urban spaces provide environmental, social, and even economic value. But at what cost?

The hidden trade-offs of rapid decarbonisation

The investment required to achieve climate neutrality within short timeframes is enormous, and public finances are not unlimited. Accelerated decarbonisation, whether through renewable energy generation, smarter mobility systems, or cleaner transport modes on which peripheral regions and islands heavily depend, requires significant financial outlays.

To finance these investments, governments face two options. The first is to raise additional revenue, typically through taxation. The second is to reallocate existing expenditure away from other areas, such as health, education, or social protection. Either way, what it boils down to is this: every euro spent on accelerated decarbonisation is a euro withdrawn from other public priorities.

These trade-offs are not only fiscal, they are fundamentally social. The critical issue, therefore, is whether rapid climate neutrality policies risk widening regional disparities and disproportionately affect households that are already at risk

A simple example: Who really benefits?

To meet climate neutrality goals, peripheral regions and islands rely heavily on incentive schemes in energy and transport. Gozo offers an illustrative example: a double insular island where climate neutrality targets are more optimistic than those of the main island, following the government’s intention to make Gozo the first climate neutral region in the Maltese islands.

Over the years, the government has subsidised household photovoltaic (PV) systems, battery storage, and electric vehicles (EVs). Although these schemes were introduced nationally, they were designed to be more favourable for Gozo than for other regions in Malta.

Consider a household in Gozo that installs PV panels with energy storage, and replaces an old-fashioned combustion engine car with a new EV. Through existing schemes, that household can benefit from a maximum of €21,550 which is equivalent to around 60% of the annual median income of a Gozitan household. Equipped with PV panels, a battery, and an EV, the household substantially reduces energy expenditure, limits exposure to future energy price shocks, and moves closer to full energy self-sufficiency.

At first glance, this appears ideal: households save money while contributing to climate goals. But a more fundamental question is: which households are actually benefiting?

Primarily, those who own their homes and have access to a private roof, meaning owners of houses, penthouses, or top-floor apartments. Households living in apartments and maisonettes without roof access are largely excluded from these schemes. These households are more likely to fall within low- to middle-income groups.

In other words, climate policy risks becoming a system where the most advantaged households are subsidised to become even more resilient, while others are expected to shoulder the broader costs.

Even after these efforts, climate impacts persist

Crucially, climate change will not stop at the borders of peripheral regions and islands. Even if these territories achieve climate neutrality, they will continue to experience rising temperatures, more frequent extreme weather events, coastal erosion, and water scarcity. Once again, the key question is: who will be most affected?

Consider the increasing frequency of heatwaves. Higher summer temperatures raise household energy consumption, particularly for cooling. Low-income households, often unable to invest in PV systems or energy-efficient retrofits, will bear these additional costs.

This is already problematic even under constant energy prices. It becomes significantly worse if energy prices rise to finance the ecological transition, including public investment in renewable energy infrastructure. The result is a real risk of distributional imbalance and deepening inequality.

This leads to an unavoidable policy question: does it make sense for peripheral regions and islands to prioritise climate neutrality in the short run, often at high financial, economic, and social cost, when they will still be heavily affected by climate change regardless of their emissions?

Adaptation versus mitigation: A question of priorities

The answer is not straightforward and requires careful, context-specific analysis. However, one conclusion is difficult to ignore. For small regions and islands, investing in climate adaptation often makes more economic and social sense in the short- to medium-term than focusing almost exclusively on climate mitigation.

Given their negligible contribution to global emissions, climate neutrality in a small territory will not stop climate change. Adaptation, by contrast, delivers direct and immediate benefits by reducing exposure to climate risks and limiting social and economic damage.

This does not mean abandoning mitigation. Some adaptation measures also support mitigation objectives. Improving building energy efficiency enhances resilience to extreme temperatures while reducing energy demand. Urban tree-planting and shaded pedestrian routes mitigate the urban heat island effect, improve walkability, and can indirectly reduce transport emissions. Yet mitigation and adaptation are not the same. They are close relatives, not twins.

A more realistic path forward

In the short- to medium-term, peripheral regions and islands should focus on strengthening water storage and management systems, protecting coastlines and other vulnerable low-lying areas, and reducing the urban heat island effect through measures such as green roofs, shading, and the expansion of urban green spaces and fresh-air corridors.

At the same time, improving building resilience to extreme weather and developing more resilient transport networks are essential priorities. Once these foundations are in place, the transition towards climate neutrality can be pursued in a more effective and equitable manner.

This sequencing is directly relevant for Gozo. Despite the island’s ambitious climate neutrality targets, the short- to medium-term policy agenda should focus on adaptation. Investments should include the expansion of urban green infrastructure (such as the Victoria Park project), more resilient transport connections with mainland Malta, and the protection of exposed coastal zones through the Marsalforn breakwater project and a Master Plan for Xlendi. Roads should also continue to be upgraded to integrate water catchment and drainage systems. Once these foundations are in place, Gozo will be in a better position to take steps towards climate neutrality.

A call for realism

Climate neutrality is an important objective for peripheral regions and islands, but it should be treated as a long-term goal rather than a short-term obligation. Detailed climate neutrality plans remain essential, yet their timelines must reflect social, fiscal, and territorial realities.

Placing excessive strain on small regions risks undermining public trust. Climate scepticism often emerges not from denial, but from perceived unfairness and a lack of visible benefits. Communities are more likely to embrace change when they understand how it protects their health, homes, livelihoods, and daily lives.

Climate neutrality must not come at the expense of social inclusion, and no one should be left behind. If done right, it is not merely an environmental objective but a cornerstone for building fairer and more resilient societies.

Juergen Attard issenior manager Research & Policy at the Gozo Regional Development Authority