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U-turn on eco-tax rise gives President Macron fuel for thought | Environment

Category: Political Protests,Politics

Emmanuel Macron’s defeat by the gilets jaunes (yellow vests) movement over a proposed eco-tax rise is likely to come as a painful lesson for environmental policymakers at this week’s UN climate talks in Katowice.

After the most violent protests in Paris for half a century, the French president has been forced to postpone a planned eco-tax rise on fuel, showing how ecological measures can have explosive consequences if there is any suggestion they are being used to “greenwash” austerity.

Other leaders will need better timing and a far defter political touch before they introduce similar measures to reduce carbon emissions.

Dozens of countries and cities have introduced or drawn up plans for carbon taxes to speed the transition from fossil fuels that are warming the planet to increasingly dangerous levels. They are rarely easy to implement. There have also been protests and political backwards steps in Belgium, Tunisia, Algeria and Canada.

Macron has positioned himself as one of the pioneers. He has championed the Paris climate agreement and promised to make France an example of how economies can grow as they cut carbon emissions. In contrast to the me-first-ism of Donald Trump, the French leader’s slogan has been “Make our planet great again”.

According to government officials, this goal was behind the plan to increase petrol prices by four euro cents a litre from January. This, they said, was one of several steps towards France’s commitment to cut carbon emissions by 40% by 2030 and to ban sales of petrol and diesel vehicles by 2040.

The economic and environmental logic is sound. Raising the price of carbon is an essential tool if global warming is to be kept below the dangerous level of 1.5C, according to the recent report by the United Nations intergovernmental panel on climate change. This year’s Nobel laureate for economics, William Nordhaus, was one of the first advocates of a global carbon tax as the best way to put a true cost on the use of coal, oil and gas.

It is a matter of justice. Without a carbon tax, the health and pollution costs of cars and trucks are unfairly passed on to society in the form of respiratory problems, congested, dirty streets and an increasingly unstable climate. Fuel taxes are also an incentive for change. As the former Nasa scientist James Hansen has noted: “As long as fossil fuels seem the cheapest energy to the public, they’ll keep using them.”

But while policy wonks across the world agree on the principle of “polluter pays”, Macron has clearly found it hard to convince the French public on two key questions: what they are supposed to be paying for and whether the burden is being fairly shared.

The majority of the hundreds of thousands of gilets jaunes protesters are from low- or middle-income families who are hardest hit by the fuel price rises because they spend a disproportionate share of their incomes on fuel and transport.

They may have found the eco-tax rise easier to stomach if the revenues were then redistributed among the public, a model already used in British Colombia that Justin Trudeau plans to expand throughout Canada.

There would also be less hostility if the revenues were ringfenced for renewable energy, environmental homes or a better healthcare system to deal with the costs of air pollution and rising temperatures. Instead, protesters have been able to argue the tax will be used mainly to cut France’s budget deficit by paying off wealthy creditors, in effect worsening inequality.

Macron has also demonstrated poor timing by announcing a rise in diesel and petrol taxes after a year in which oil prices rose by 23% largely because of Opec limits on production.

“Maybe he should have taken that into account and waited until the price goes down. Or perhaps he should have returned some revenue,” said Bob Ward of the Grantham Institute. Instead of a tax, he said governments could also consider alternatives such as raising standards on vehicles, which has been the approach taken by California. “You have to find the right mechanism.”

It also helps to secure public approval. The city of Boulder in Colorado introduced a carbon tax after a majority of voters cast ballots in favour of the move. Seven US states are also considering similar steps following midterm elections in which many Democrats campaigned on promises of climate action.

In the UK, a carbon tax in the power sector has helped to phase out coal, but the prime minister, Theresa May, appears too politically weak to consider action on fuel. In the most recent budget, the chancellor once again left fuel taxes unchanged, where they have remained since 1999. Earlier governments promised “an escalator” of steadily rising duties to tackle environmental concerns about road traffic. But this commitment has not been met since massive fuel protests in 2000.


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