France commune

Macron learns the hard way: Green taxes carry political risks

PARIS (Reuters) – When Emmanuel Macron came to power, he put the environment at the heart of his agenda. Eighteen months later, anger over those policies has fueled protests that pose a huge challenge to the French president.

FILE PHOTO: Demonstrators wearing yellow vests, a symbol of French drivers’ protest against higher diesel taxes, stand in front of a police water cannon in Place de l’Etoile near the Arc de Triumph in Paris, France, December 1, 2018. REUTERS/Stephane Mahé/File Photo

Rioters torched cars and buildings in central Paris on Saturday after two weeks of protests caused in part by higher fuel taxes which Macron says are needed to tackle climate change. Some protesters called on him to resign.

Macron’s plight illustrates a conundrum: how do political leaders introduce policies that will do long-term good for the environment without inflicting additional costs on voters that could hurt their re-election chances?

It’s a question facing world leaders as delegates hold talks in the Polish city of Katowice this week to try to produce a “rulebook” to flesh out the details of the Paris Agreement to 2015 on the fight against climate change.

“Clearly, the countries with the highest inequalities are those where this type of pushback is most likely,” said François Gemenne, an environmental geopolitics specialist at SciencesPo in Paris, of political risks.

Naming Italy, the United States and Britain as countries where environmental measures could risk a backlash from voters, he said: “I guess that’s one of the reasons why populist leaders have tend to be very skeptical of climate change and environmental measures.”

Protests in France inspired a similar movement in neighboring Belgium, where protesters took to the streets on Friday.

There have also been small-scale protests in Canada against Prime Minister Justin Trudeau’s plan to impose a federal carbon tax on provinces unwilling to tackle climate change.

What was once widely seen by governments as a win-win transition to cleaner energy now looks more like short-term costs with huge social disruption, followed by possible long-term gains.

Another challenge facing leaders concerns how they use the revenue from policies intended to help the environment: should the money from carbon taxes be used directly to fight climate change or to fill holes in the national accounts?

CARBON TAXES

Macron said after the latest protests in Paris that he would summon ministers to discuss the crisis when he returned from a G20 summit in Argentina. Prime Minister Edouard Philippe has canceled plans to travel to Katowice for the climate change summit.

Macron has introduced new carbon taxes to incentivize motorists to change their behavior and protect the environment.

Macron has watered down some of his campaign promises on the environment since taking office, and his popular environment minister resigned in August over slow progress. But he showed little willingness to compromise in the face of protests.

The fuel tax is accompanied by other measures, including incentives for the purchase of electric vehicles.

Unveiling a medium-term energy plan for France last week, he held out an olive branch saying he would revise fuel prices every quarter, but said carbon taxes would remain.

Its objective is for France to reduce its carbon emissions by 40% by 2030 and at the same time stimulate the use of cleaner energies. Emissions are currently increasing and 75% of energy consumption in France comes from fossil fuels.

“When talking about the actions of the nation in response to the challenges of climate change, it must be said that little has been done,” he said.

Macron also said he will fight to try to salvage the Paris climate accord, which aims to keep global temperature rise to between 1.5 and 2 degrees Celsius, a critical threshold.

Scientists are increasingly concerned that countries will not meet their targets and need to be more ambitious. Yet citizens are worried about their immediate lives.

“TRANSITIONAL POLICIES”

In Canada, addressing the issue of how governments use money from carbon taxes, the Trudeau government promised to return money collected from provinces directly to taxpayers.

But in France, most of the revenue generated will be used to fight the national budget deficit, increasing anger against Macron, who opponents on the left call the “president of the rich”.

Of the 34 billion euros ($38.71 billion) the French government will raise on fuel taxes in 2018, only 7.2 billion euros is earmarked for environmental measures.

Simon Dalby, a specialist in the political economy of climate change at Wilfrid Laurier University in Canada, says carbon taxes should be part of broader measures to change the way people live, including transportation and better and greener buildings.

“This is about transition policies to a post-fossil energy world, something that needs to be done quickly if the worst climate disruption predicted for decades to come is to be avoided,” he said.

Gemenne said the protests in France were not expected to die down soon and could emerge in other countries as they take more determined action against the broadcasts.

The danger, he said, was inaction or acting too late to prevent global warming. At the same time, politicians must be able to show that they act fairly and equitably.

Reporting by Bate Felix, Additional reporting by Michel Rose, Editing by Luke Baker and Timothy Heritage