Taking to the streets – James Higgins, Partner, Ecuity
Article written by James Higgins, originally published in the February edition of H&V News Magazine.
Drivers across the country are reliant on their four wheels of convenience for work, home or play. Be it petrol or diesel, there are over 38 million fossil fuel-guzzling vehicles on the road in Great Britain and many of us would find ourselves unable to get anywhere without one. Of course, during winter months we also rely on additional fossil fuel for space heating. With incomes generally flat over the past decade, the general public is already struggling to put up the cost of the energy. But as we amp up the heating in these grim winter months and pollute our British streets on the way to our destination, thousands of commuters over in France have left the world’s politicians unsure where they are headed in relation to climate change and air pollution at a time when there is so much that needs to be done.
Triggered by environmental taxation imposed to phase out combustion engines and pave the way for a cleaner planet, the ‘gilet Jaunes’ have taken to the streets in protest, declaring that tax is already high enough. The French people, heavily reliant on their vehicles and already struggling to manage increasing living costs and taxes with work that doesn’t pay, have rejected the diesel tax increase set at 24 cents a gallon. But as Macron’s visions of a sustainable future are rejected by his people, we’ve seen a humiliating back-step from the government and it might well have a domino effect.
As the French leaders shy away from environmental action in an attempt to silence the thousands, other governments such as our own wrestle with the dilemma of how to afford a greener future when the general public have no extra cash. In the fight against climate change, we’ve seen that the most powerful weapon is the tax code, with Macron suspending the increase for at least the next six months. Yet with violent protests proceeding well into the new year despite the suspension, will Macron aim for a more positive reaction to carbon tax later down the line or will he aim to buy back support of the nation with a total policy abolition?
Of course, the general public largely accepts that climate change is man-made, but while they acknowledge that environmental legislation is positive, the gilet jaunes have clearly illustrated that public support comes with a limit. With an already divided nation in the UK as we battle through Brexit deals and speculate on the future, policymakers may now be questioning whether they can increase carbon taxes in the UK if it means asking the general public to pay the price.
Potentially moving away from the Emissions Trading Scheme (ETS) in our breakup from the EU, green campaigners had hoped that the government would take advantage of the opportunity to positively reform carbon pricing here in the UK. As it stands right now, critics argue that the ETS encourages carbon leakage and offers little incentive for businesses to cut their emissions even with the additional Carbon Price Floor that we can credit with pushing coal power plants off the grid. But forcing the country’s biggest emitters to pay to pollute does nothing for carbon reduction when they simply incorporate that payment and inflate consumer costs. As Macron seeks a way to relieve the burden of environmental tax on the French, we can only hope that future interventions in the UK keep the general public on side.
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See the original article from H&V here