Climate policy fuels protests

It’s one thing to oppose bad climate change policy. It’s quite another to oppose climate change policy tout court. Unfortunately, these things are confused all the time. It happened in the commotion over Auckland’s regional fuel tax. It happened much more spectacularly in the revolt against President Emmanuel Macron in France.

But by over-simplifying why people protest, we risk limiting our vision of what is politically possible.

The gilets jaunes (or yellow vest) protests in Paris are not simply a revolt against a fuel tax. This is much more complicated story.

For a start, Macron is wickedly unpopular. His election was supposed to mark a youthful break from establishment politics. But with his pre-political life in philosophy and finance, he was hardly an alternative to the elitist status quo, rather an entrenchment of it.

His ongoing fiscal reforms include tax breaks on wealth, which will benefit France’s top 1 per cent. His approach to governance is thoroughly top-down, embodied by his heroically arrogant leadership style. The fuel tax was the final straw: one more imposition by wealthy Paris on the struggling regions. There are strong affinities with other antiestablishment outbursts elsewhere, including the Brexit vote over the pond.

But the fuel tax also goes against good climate policy design.

It is a regressive tax, meaning it places a greater burden on the poor than the rich.

For low-income households, higher proportions of income are spent on goods and services, so the relative tax take is higher. The gilets jaunes movement is dominated by tradespeople, contractors, artisans – all people who rely on vans and trucks for their work.

The increased tax on diesel and petrol, by 6.5 and 3.9 cents a litre respectively, was going to test the already straining balance sheets of small and medium-sized businesses.

When people talk of a just transition, this is what they mean: how do we move to low-emissions economies in ways that don’t leave people behind? How do we ensure that people who have the least capacity to transition are not left in the lurch, but supported through the transitional process?

On this test, Macron has utterly failed. Tellingly, when Ghislain Coutard, the mechanic who started the yellow vest phenomenon, was asked if he supported environmental policy, he said: ‘‘Actually we would all love to drive with clean energy, but the government’s plan doesn’t stand up.

That’s not how we’re going to achieve anything. We can’t even pay for our cars now, so it’s impossible to all buy electric cars or hybrids.’’

This is where well-designed climate policy is vital, a lesson that’s no less important for New Zealand. After discontent over fuel prices, driven more by global oil prices than taxes, Prime Minister Jacinda Ardern has ruled out further regional fuel taxes. This creates the space for more careful policy design in future.

I was in Paris last year to discuss environmental fiscal reform with the OECD. Its policy advisers stressed the importance of aligning instruments with objectives.

If the aim is to discourage emissions, by all means impose a fuel tax. But take into consideration its distributional effects. If it is regressive, acknowledge thisfact, then build it into tax policy design.

A climate dividend, for example, where the proceeds from carbon pricing are redistributed to lowincome households, ensures fuel taxes are fiscally neutral, or even progressive. This would strengthen public support for climate policy by alleviating the strain on the most vulnerable, or even leaving them better off.

However, if the aim is to generate revenue for transport infrastructure, then impose a congestion charge rather than a fuel tax, because it is the diversification of transport options that you are aiming for. Reduced emissions is a secondary effect, a cobenefit, but traffic congestion involves many more external costs, including accidents, lost leisure and work hours, air pollution, and degraded infrastructure.

Taxing carbon may encourage people to shift to electric cars, which is a good thing, but it doesn’t alleviate congestion, and it reinforces inequality because people who can’t afford electric cars can’t dodge the tax. A congestion charge, by contrast, will increase demand for transport alternatives, as well as the revenue to pay for them.

Macron needed only to board Paris’ enviable train network to hear the OECD’s advice.

Hopefully, our Government has learned its lesson, that it isn’t only climate policy we need, but welldesigned climate policy that takes care for its effects. So Air New Zealand may strike under Labour and Christopher Luxton the leader of the Business Think Tank. Of course we all know what comes next. The rerries silly. So am I the only one who notices all the strikes under Labour? Of course the Russell Armitage ites will be delighted at this.

After all, we can be shocked at the murder of tourists and the increase in crime and road deaths under Labour and the non affordable non Kiwi build houses, or say you voted for this mob and The Mob is what you have got. It’s called Labour, ‘‘Read between the lines,’’ Greens and very marginal New Zealand First, who want to open our borders to everyone under United Nations mandate. That of course makes it right.

In summary we murder guests, kill innocent people on the roads and have no regard for people with mental problems and of course our immigration policy is unbelievable. Literally. Gosh I am so glad we have a Coalition Government with Phil Twyford at the helm.

Well he must be. He is the only MP who makes up policy on the hoof with no reference to the Prime Minister.

Then again he may have talked with Winston and of course we all know who the real prime minister is, but not for very much longer. Bring on the next election so those who like me voted for him can show our (Non) appreciation. So Shane, what are you doing next? It’s a pity Max Christoffersen is such a dinosaur and has not read any of the research which shows that all the ‘‘lock them up ‘‘ brigade do is make more criminals. Retribution may sound good but it doesn’t work if we want a civil society. The teens he hates are already hated and are reacting to society because of it. If we surround them with helpful and well researched programmes, they are much less likely to reoffend. It works in Europe with their low crime and prison rates.

This is the man who scorned the whole of the Southwest of Hamilton, (Nov 16) as the suburb where you shouldn’t send your child to school. That was rubbish too, as many past pupils can show how it led them to success. He sounds like a person who dislikes low socio people and their suburbs.

I hope his views are not taken seriously. Opinions are fine but give us a commentator who lives in Hamilton and does more than write uninformed rubbish.

Macron’s fuel tax goes against good climate policy design.

After allocating money for all the projects by a massive increase in rates and fees, now our elected representatives say for the Peacocke’s Development there is a $35m hole. Who is responsible for it? The decision-making elected representatives inside Council chambers.

After signing documents and enjoying the hospitality for V8s in VIP lounge, they blamed previous Mayor Michael Redman for the $40m debt it had created.

After signing the papers and voting in favour of all decisions put forward in council chambers by previous Mayor Julie Hardaker soon after she left blamed her saying there was a big hole in the council books.

After the October 2019 elections, new mayor and councillors will say the previous mayor and councillors left with a $35m hole and we will have to increase the rates.

Finally, it will be left for the ratepayers to pay by the way of increase in rates.

I do not think this will be the end of the story.