On Saturday March 16, tens of thousands of people marched through the streets of Paris demanding action on climate change. At the same time and not far away, a group of gilets jaunes protestors were demonstrating, sometimes violently, against the economic policies of President Macron—one of which increased the tax on gasoline and diesel fuel. This was intended to reduce emissions of greenhouse gases from the transport sector and help France meet its commitments under the Paris Agreement.
Something is wrong here. Both groups of protesters agree that climate change is a problem that needs to be urgently tackled, but they disagree vehemently about how this should be done.
Pricing carbon is a delicate instrument that needs to be wielded with care. Either Macron doesn’t understand this or doesn’t care. Either way his policies to reduce carbon emissions are incredibly cack-handed.
Increasing taxes that push up the price of gasoline and diesel fuel is likely to be unpopular almost everywhere that people drive vehicles, and where agricultural produce and goods are delivered by road. Which is to say just about everywhere in North America and Europe.
There is only one way to sweeten this bitter pill and that is to make carbon pricing revenue neutral. Households are compensated for the additional costs they will incur paying for fuel, and receive a modest annual payment–ideally in advance.
In some places, communities will swallow this pill and grin and bear it. But this requires a widespread understanding of the urgency of climate action and a willingness to pay the price of being a polluter–which in fact is what all of us who operate a gasoline or diesel vehicle actually are. But in many jurisdictions, and obviously in France, an increase in the price of fuel is going to be met with strong resistance.
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