[WSMDiscuss] Why climate activists have common interest with yellow wests and not Macron

Tord Björk tord.bjork at gmail.com
Wed Dec 5 17:54:15 CET 2018

sent by Tord Björk Why climate activists have common interest with yellow
wests and not Macron

Yellow vests: Macron’s fuel tax was no solution to climate chaos
Maxime Combes

4 December 2018
The French government has now decided to suspend a planned eco-tax on fuel
in response to mass protests. While the movement of the ‘yellow vests’
(gilets jaunes) has turned into a broader revolt against inequality and
Macron’s neoliberal reforms, economist and climate activist Maxime Combes
(Attac France) argues that as a way to tackle climate change, the tax is
neither fair nor effective.

Analysis originally published on the daily internet journal of ideas AOC
and translated by Taisie Tsikas.

It is in the name of “ecological transition” and the need to “liberate
households from dependence on petrol” that French Prime Minister Edouard
Phillippe justified the status quo: no new proposal was announced the day
after the “gilets jaunes” protests. By making the carbon tax, and hence the
rise in fuel prices, the central plank of its policy to reduce fossil fuel
consumption – a legitimate objective in itself – the government, blinded by
an ideological and narrow understanding of the role that ecological fiscal
policy can and must play, are leading the transition to a dead-end.

This discourse is intended to be simple and accessible: by increasing
prices of fuels, consumers can be made to modify their behaviour, reducing
their use of vehicles and/or buying more fuel-efficient vehicles. The same
applies to boilers that use oil, in which case the emphasis is put on
replacing them in favour of wood-burning or gas boilers. The case of
tobacco is often used as an example: hasn’t its increase in price, done in
the name of public health, reduced its consumption?

Little impact on behaviour

However, when spending is constrained in the short term, increasing the
price does not necessarily reduce consumption. Or at least not by much.
Economists say that price elasticity – that is, the sensitivity of
consumption to prices – is weak or very weak. In the case of fuels, the
price elasticity is generally understood to be between -0.1 and -0.35%:
when the price of fuels – and notably diesel – increases by 10%,
consumption falls by between 1 and 3.5%. To reduce consumption of at least
10% – and up to 35% – and thus to have a non-negligible effect in the fight
against climate change, the price of fuel would have to be doubled.

Doubling prices is not what is predicted by the government of Emmanuel
Macron, which has endorsed an increase in the domestic consumption tax on
energy products (TICPE) of 23 cents per litre for diesel by 2022, and 11.5
cents for lead-free, which is about 7 to 15% higher than current prices
(around 1.5 euros per litre). As a result, the expected decline in fuel
consumption will be limited to a few percent by 2022.

By comparing the global fuel volumes used by road traffic between 2007,
just before the economic crisis (53.4 million cubic meters) and 2013, the
lowest point of consumption in recent years (47.8 million cubic meters), we
can get a sense of scale. The decrease in consumption is limited to about
7%. In the same period, prices for gasoline and diesel increased by around
30%. It is therefore difficult to conclude that increases in fuel prices
lead to significant reductions in consumption from the point of view of
combating climate disruption. Since then, consumption levels have been
rising again (an increase of 4% between 2013 and 2017).

In the short term, the level of fuel consumption is therefore insensitive
to price changes: the price signal, invoked by all proponents of the carbon
tax, works rather poorly, with the most limited effect on collective
consumption. However, in the fight against climate change, it is the total
volume of fuel consumed, and therefore the total greenhouse gas emissions
released into the atmosphere, that matters.

Reinforcing inequalities

Although limited, the impact of price increases on consumption is very
different depending on the type of household. This is a well-known effect
and has also been seen in the context of rising tobacco prices. In the case
of tobacco, it was found that the increase in price, combined with
prevention messages, primarily reduced the tobacco consumption of well-off
social classes, thus reinforcing health inequalities to the detriment of
those in poverty.

Another observation that counts equally here: the price sensitivity of
household budgets to fuel prices is highly dependent on the household’s
standard of living. While the richest 10% of households travel three times
more kilometres than the poorest 10%, it is estimated that they reduce
their consumption much less when prices increase than poor households
reduce theirs. The price signal works very poorly for households that have
the means to cope with it, and their behaviour changes very little.

However, these same 10% of the wealthiest households emit four times more
carbon than the poorest 50%. A home among the richest 10% therefore has a
carbon footprint twenty times higher than that of a household belonging to
the poorest 50%. With such a policy, the highly polluting lifestyle of the
richest households is spared, while the poorest households pay the highest

In fact, poor households with vehicles have, on average, older and less
efficient cars than the richest. They are also much more exposed to rising
fuel prices: the 20% poorest households spend more than 7.5% of their
budget on fuel, against less than 4% for the richest 10%.

This is the triple difficulty for poor households: more exposed than
wealthier households to the increase in fuel prices, having less means to
cope with it and without necessarily having the opportunity to change their
vehicles or boilers. This last point is essential: it is easy to show that
more than 50% of the budget of the poorest households are “pre-committed”
expenditures, that is to say constrained.

Is a conversion possible?

When you are poor and the price of fuel increases, you don’t change your
vehicle like you change your shirt. We live with what we have: when we do
not have the means to change something, we live with our polluting vehicle
or oil boiler for as long as possible, and we restrict our other
consumption, the quality of our heating or our journeys: such a policy
leads to eviction by prices. Price is no longer a ‘signal’ to encourage
behavioural change, but a barrier preventing us from meeting mobility or
heating needs, at least in the short term.

The government claims to want to respond to this situation with, on the
heating side, a very small increase in the energy check [an allowance paid
to households with low incomes to help pay energy bills] (from 150 to 200
euros) and a conversion bonus – not specified at this time – to remove
oil-fired boilers within the next 10 years. On the vehicle side, it offers
a conversion bonus of up to 4000 euros for the poorest 20% of French
people. These would be people whose standard of living is less than 12,550
euros, with a low capacity to buy hybrid or electric cars whose purchase
price can be as much as twice their annual income.

This is also one of the perverse effects observed: of the 250,000
conversion bonuses already paid out so far, 93% have been used to purchase
cars with combustion engines (47% of which are diesel) and barely 7% for
hybrid or electric vehicles. While 8.7 million polluting vehicles roam
French roads, the government has only budgeted for one million conversion
bonuses, or just 11.5% of polluting vehicles.

Rising prices and the conversion bonus therefore condemn almost all
households, whether they have bought a new vehicle – mostly with a
combustion engine – or not, to a strong dependence on future fuel price
developments, vulnerable to these prices being pushed up even more by
further increases in the carbon tax or by international markets.

Moreover, savings promised to households with the purchase of a more
efficient vehicle thanks to the conversion bonus will be worth nothing if
future governments want to achieve reductions in fuel consumption that
would be significant from the perspective of the fight against global
warming. Will investing more than one billion euros in a five-year period
for such an outcome be worthy of an ambitious environmental policy?

First reduce the need for mobility and heating?

By making the increase in fuel prices the central policy that must drive
the inhabitants of the country to change their vehicles and change their
boilers, without reducing their mobility needs and their heating needs,
Emmanuel Macron and the government are making themselves prisoners of an
ideology that prevents action on the structural causes of too great a
dependence on fossil fuels.

Putting an end to urban sprawl and bringing economic activities closer to
workplaces – rather than moving them away from already urbanized areas –
relocating public services and ensuring the sustainability of local shops,
developing public transport and options for alternative modes of transport,
are priority areas for reducing the need for mobility reliant on carbon.

In a recent report, the OECD also indicated that some public aid has
favoured the destruction of natural habitats and urban sprawl. This is
notably the case for the development tax, which is levied on real estate
construction operations, which could be changed to favour
low-space-consuming activities and avoid projects that lead to perpetuating
urban sprawl and low-density peri-urban areas. Is it not time to save the
soil, to reuse those already artificialized and close to existing transport

While a new bill on transportation is currently being prepared by the
Minister of Transport Elisabeth Borne, it seems more than absurd that the
government stubbornly supports the construction of new urban or peri-urban
highways in Strasbourg (GCO), Castres (A69) or Rouen (Liaison A 28-A 13),
while at the same time it encourages or tacitly validates the closure of
railway lines and train stations nearby, as in the South of France or in
the Massif Central.

The State of California’s transport services have just acknowledged that
the expansion of existing motorways, or the construction of new motorways,
generates additional induced traffic that can only eventually lead to the
saturation of the new routes; more roads means more traffic. Pursuing the
construction of new motorways therefore inevitably leads to encouraging new
journeys to be made, a phenomenon which is particularly linked to urban
sprawl, and therefore to additional consumption of fuels, which the
government claims to want to reduce.

Similarly, reducing the heating needs of households through a massive
investment plan in the renovation and insulation of the existing housing
stock should be a constant focus for the public authorities. This is not
the case today: time and time again the government has halved the energy
transition tax credit (CITE), which helps households install more efficient
wood burners, and it has cut the ecology budget by nearly 600 million euros
from the revenues derived from fuel taxes.

Why exonerate the most highly-polluting businesses from the carbon tax?

How can a policy of raising fuel prices for households be justified when
companies are either exempted from these increases – in particular in air
and maritime transport – or hardly affected by the very weak increase in
the price of carbon in the market for European quotas? Furthermore, the
proceeds of these taxes are not used, for the most part, to finance
ecological transition policies that are still underfunded.

By defending an inefficient and anti-redistributive fiscal policy, and by
refusing to accompany the ecological taxation with a transition plan
capable of reducing the mobility and heating constraints that weigh on
households, Emmanuel Macron and the government are in the process of
ruining public acceptance of taxation – particularly the consent to
ecological taxation which, if well thought out and researched, could be
useful for reducing the levels of pollution of the richest households.

As the ecological crisis continues to worsen, they also risk making the
ecological transition unpopular. It is a risk that will endure and that
must be avoided at all costs. Now is the time to ensure that ecological and
climate politics do not aggravate inequalities but, on the contrary, help
to reduce them and allow us to move towards more fiscal and social justice.
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