Paying people to cut their carbon could be key
In a depressing coincidence, the yellow vest protests were raging in France when diplomats from nearly 200 countries assembled in Katowice, Poland, to write a common rulebook on climate-friendly policies. What the COP24 summit eventually produced isn’t legally binding, but it does present a way to make the 2015 Paris Agreement operational.
The snowballing French protests, triggered by a carbon tax on fuel, point towards the problems of such gatherings and of those faced by any global deal on climate change. What is the point of governments agreeing to limit the use of fossil fuels by carbon pricing and other measures when citizens furiously reject them and force politicians to roll them back, as president Emmanuel Macron now has? Are the gilets jaunes proof that it is impossible to get broad public support for climate-friendly policies that will hit the pockets of working people?
Public awareness and concern about climate change is growing around the world. While denialism is also increasing – not least from the Trump White House – the effects of global warming are becoming harder to ignore. These include escalating extreme weather events, shrinking glaciers, the early flowering of trees, accelerated sea level rise, more frequent wildfires, and longer, more intense heatwaves. However, it is still difficult to get people to accept the immediate pain of taxation and environmental regulations in order to prevent repercussions that many of them believe to lie far in the future.
If there is any one lesson to be gleaned from the yellow vest protests and the Katowice agreement on curbing carbon emissions, it is that governments must actively sell policies designed to combat climate change.
Preferably, they should do this before introducing them, clearly framing their objectives and outlining what citizens stand to lose and gain. As Laurence Tubiana – France’s former climate change envoy and a key architect of the 2015 Paris agreement – wrote in a recent essay, the messaging is key.
One of the more interesting examples of such messaging is under way in Canada, where the new federal backstop carbon tax imposed on fuel will soon come into effect. It will start at $20 (Dh54) per ton of emissions in 2019 and rise by $10 every year to $50 (Dh110) per ton in 2022. What might make the tax bearable – even attractive – to Canadians is the way it is set to work. About 90 per cent of the revenue raised will go straight back to citizens as “climate action incentive” payments. According to Canadian government estimates, roughly 70 per cent of citizens will get more in rebates than they will pay in taxes. From next summer, people will receive tangible proof – a cheque in the mail – making carbon-cutting policies a painfree and personally beneficial exercise.
It would theoretically represent a win for ordinary Canadians and for prime minister Justin Trudeau’s government ahead of next year’s federal elections. But a lot could go wrong. Mr Trudeau’s political opponents, especially the main opposition Conservative Party, will naturally pursue a strategy hostile to the carbon tax. The government and its climate-change policy will be blamed for the rising cost of living. Mr Trudeau could lose the election and his policy would then be junked.
Even so Mr Trudeau’s revenue-neutral taxation plan has a lot going for it, putting money in people’s pockets and making them feel virtuous at the same time.
The Canadian scheme may be pioneering in terms of scale, but the idea is hardly new. Switzerland’s incentive tax on hydrocarbon fuels has returned two-thirds of its receipts to households and businesses for 10 years.
Of late, the notion of incentivising a low carbon footprint by paying people to consume less energy has been gaining ground. In April, researchers at Massachusetts Institute of Technology and the National Renewable Energy Laboratory in the US recommended putting a price on carbon and returning the generated revenue to the public in one form or another. State legislatures in California and Massachusetts debated such “fee and dividend” schemes this year.
This raises an important question. Why should people need to be compensated for doing the right thing, especially when we are all custodians of our planet? Shouldn’t the environment be a pressing concern for everyone, with or without a carbon tax rebate?
The UN Intergovernmental Panel on Climate Change warned in October that we are not yet on course to avoid the most catastrophic impacts of rising global temperatures. We have just 12 years to prevent warming of more than 1.5C above pre-industrial levels, at which point irreversible climate change will set in.
Shouldn’t the French government, the yellow vests, and the people of Canada and Switzerland be mindful of this? What about the world’s three biggest polluters: China, the US and India? In theory, yes, they should. In practice, sweeteners help the medicine go down more easily. The cleanest way to less carbon-pollution is revenue-neutral taxation. In that respect, France has much to learn from Canada.
It is difficult to get people to accept the immediate pain of tax to prevent repercussions they believe lie far in the future