Paris Riots over Fuel Taxes Dim Hopes for Climate Fight

by Seth Borenstein and Angela Charlton (Associated Press) The “yellow vests” in France are worrying greens around the world. The worst riots in Paris in decades were sparked by higher fuel taxes, and French President Emmanuel Macron responded by scrapping them Wednesday. But taxes on fossil fuels are just what international climate negotiators, meeting in Poland this week, say are desperately needed to help wean the world off of fossil fuels and slow climate change.

Economists, policymakers and politicians have long said the best way to fight climate change is to put a higher price on the fuels that are causing it — gasoline, diesel, coal and natural gas. Taxing fuels and electricity could help pay for the damage they cause, encourage people to use less, and make it easier for cleaner alternatives and fuel-saving technologies to compete.

These so-called carbon taxes are expected to be a major part of pushing the world to reduce carbon dioxide emissions and try to prevent runaway climate change that economists say would be far more expensive over the long term than paying more for energy in the short term.

But it’s not so easy for people to think about long-term, global problems when they are struggling to get by.

Yale University economist William Nordhaus, who won this year’s Nobel prize for economics, said the tax was poorly designed and was delivered by the wrong person. “If you want to make energy taxes unpopular, step one is to be an unpopular leader,” he said. “Step two is to use gasoline taxes and call them carbon taxes. This is hard enough without adding poor design.”

Macron, like French presidents before him, made environmental and energy decisions without explaining to the public how important they are and how their lives will change. He’s also seen as the “president of the rich” — his first fiscal decision as president was scrapping a wealth tax. So hiking taxes on gasoline and diesel was seen as especially unfair to the working classes in the provinces who need cars to get to work and whose incomes have stagnated for years.

The French government already has programs in place to subsidize drivers who trade in older, dirtier cars for cleaner ones, and expanded them in an attempt to head off the protests last month. But for many French, it was too little, too late.

In September, protests in India over high gasoline prices shut down schools and government offices. Protests erupted in Mexico in 2017 after government deregulation caused a spike in gasoline prices, and in Indonesia in 2013 when the government reduced fuel subsidies and prices rose.

In the United States, Washington state voters handily defeated a carbon tax in November. READ MORE

Excerpt from Politico's Morning Energy: The month's fuel-tax riots in Paris are the latest example of the difficulty in getting people to support an energy tax to fight climate change, Pro's Zack Colman and Eric Wolff report. Case in point: reliably liberal Washington state shot down a November ballot measure proposing a carbon fee in the state. "If it can't pass in Washington state right now, I'm not sure that says that there's much of a pathway at this moment nationally," said Sen. Jeff Merkley.

Democratic candidates this year also gave carbon taxes little, if any, mention in their climate platforms, focusing instead on proposals like a phaseout of fossil fuels and investments in wind and solar power. Even some progressives who support a carbon tax, such as Ocasio-Cortez, are promoting it as just one possible element of a Green New Deal. Evan Weber, national political director with the Sunrise Movement, said a carbon tax is often framed "as the only way," but said it's been "proved time and time again to be not politically popular and we haven't even priced the policy at where economists say it needs to be." Read the story.

NYISO RELEASES CARBON PRICE PLAN: The New York Independent System Operator last week released its proposal for pricing carbon in the wholesale electricity market, Pro New York's Marie J. French reports. "The plan would charge emitting resources for their carbon emissions, with revenues being returned to utilities and other load serving entities," Marie writes. READ MORE