French ri­ots force Macron to re­treat

The Washington Times Weekly - - Geopolitics - BY DAN BOY­LAN

The tur­moil sparked by French Pres­i­dent Em­manuel Macron’s pro­posal to boost gas taxes is just the lat­est ex­am­ple of an emerg­ing po­lit­i­cal tru­ism: While economists hail them as the best, most ef­fi­cient and most ef­fec­tive way to limit green­house gas emis­sions, green taxes are prov­ing a tough sell for politi­cians who have to work and win elec­tions in the real world.

The climb­down by Mr. Macron’s gov­ern­ment — de­lay­ing for at least six months planned gas tax hikes in the face of the worst Paris street ri­ots in 50 years — is just the lat­est re­treat for green-ori­ented gov­ern­ments in North Amer­ica, Asia and Europe. The long-term ben­e­fits of lower car­bon emis­sions tend to get swamped in the polls by the im­me­di­ate pain of higher costs at the gas sta­tion and on the home heat­ing bills.

Pres­i­dent Trump weighed in on Twit­ter on last Tues­day evening, say­ing the Paris demon­stra­tors and the Macron gov­ern­ment have come around to his way of think­ing on the du­bi­ous wis­dom of higher fuel taxes as a way to fight cli­mate change.

The global cli­mate deal signed in Paris — and re­jected last year by Mr. Trump — “is fa­tally flawed be­cause it raises the price of en­ergy for re­spon­si­ble coun­tries while white­wash­ing some of the worst pol­luters …,” Mr. Trump tweeted. “Amer­i­can tax­pay­ers — and Amer­i­can work­ers — shouldn’t pay to clean up oth­ers coun­tries’ pol­lu­tion.”

The de­bate presents a clas­sic clash be­tween the­o­ret­i­cal el­e­gance and po­lit­i­cal prag­ma­tism.

Led by Paul Romer, who won the 2018 No­bel Eco­nomics Prize for his work on in­te­grat­ing cli­mate change into macroe­co­nomic anal­y­sis, top economists ar­gue that the ar­gu­ment is straight­for­ward: The quick­est, most ef­fi­cient way to re­duce car­bon pro­duc­tion is to tax it and force the mar­ket to find cheaper, cleaner al­ter­na­tives.

“Tax the usage of fu­els that di­rectly or in­di­rectly re­lease green­house gases,” said Mr. Romer, a for­mer chief economist with the World Bank. “Peo­ple will see that there’s a big profit to be made from fig­ur­ing out ways to sup­ply en­ergy where they can do it with­out in­cur­ring the tax.

“The prob­lem is not know­ing what to do,” Mr. Romer re­cently told a Cana­dian ra­dio sta­tion. “The prob­lem is get­ting a con­sen­sus to act.”

Crit­ics are ev­ery­where, even in places as un­ex­pected as lead­ing en­vi­ron­men­tal groups, in­clud­ing the Sierra Club, which has ob­jected to car­bon tax pro­pos­als that re­turn some of the pro­ceeds to tax­pay­ers. It ar­gues that the money should be ear­marked for clean en­ergy projects.

Politi­cians face the largest stum­bling blocks in avoid­ing the fears of ev­ery­day cit­i­zens that new taxes will crush them, pol­i­cy­mak­ers say. Higher gas and home heat­ing taxes also tend to fall on ru­ral and work­ing­class vot­ers who rely on cars more than their ur­ban com­pa­tri­ots. That ar­gu­ment fac­tored heav­ily in France’s “yel­low vest” protests against Mr. Macron’s pro­posed diesel tax hike, which ex­ploded into France’s largest ri­ots in decades.

“It’s pres­sure that’s been build­ing for some time, not just in France but abroad,” said H. Ster­ling Bur­nett, se­nior fel­low at the free-mar­ket Heart­land In­sti­tute.

He echoed Mr. Trump’s sug­ges­tion that the Macron gov­ern­ment is prov­ing to be out of touch with the French peo­ple.

“Noth­ing re­veals the dis­con­nect be­tween or­di­nary vot­ers and an aloof po­lit­i­cal class more than car­bon tax­a­tion,” the con­ser­va­tive Wall Street Jour­nal wrote in an edi­to­rial this week.

Some car­bon tax skep­tics are so con­vinced of the idea’s po­lit­i­cal tox­i­c­ity that they are pre-emp­tively mov­ing to strike it down.

House Ma­jor­ity Whip Steve Scalise, Louisiana Repub­li­can, and Rep. David B. McKin­ley, West Vir­ginia Repub­li­can, last sum­mer pro­posed a non­bind­ing res­o­lu­tion to con­demn all car­bon taxes. It passed by a 229-180 vote.

“I think the case is very clear by any­body who’s looked ob­jec­tively at what a car­bon tax would do to the econ­omy,” Mr. Scalise ar­gued on the floor of the House at the time. “It would be dev­as­tat­ing to our man­u­fac­tur­ing base, it would kill jobs, and I think most dev­as­tat­ing, it would rise in in­creased cost for fam­i­lies all across this coun­try.”

The world re­acts

Once seen by gov­ern­ments as a pos­si­ble way to spur the de­vel­op­ment of cleaner en­ergy sources while fill­ing their cof­fers, car­bon taxes are in­creas­ingly the source of short-term so­cial com­bus­tion.

Last week, in­spired by the French “yel­low vests,” demon­stra­tors in Bel­gium took to the street in a sim­i­lar move­ment.

Prime Minister Justin Trudeau’s plan to im­pose a fed­eral car­bon tax on Cana­dian prov­inces has also re­cently been greeted by sig­nif­i­cant po­lit­i­cal head­winds, and ques­tions of whether Ot­tawa had the au­thor­ity to levy such a tax in the first place.

“Gov­ern­ments around the world, in­clud­ing Canada’s, sold us on the idea the magic beans of car­bon taxes would save our planet from cli­mate change, while we made tril­lions of dol­lars do­ing it,” Toronto Sun columnist Lor­rie Gold­stein wrote this week, “ex­cept it hasn’t worked out that way.”

Per­haps the most strik­ing cau­tion­ary tale came in Aus­tralia, where the La­bor gov­ern­ment in­tro­duced a car­bon pric­ing scheme in July 2012. Re­sis­tance to the idea was so strong that it was repealed just over two years later.

In a sub­se­quent anal­y­sis, the Cen­ter for Pub­lic Im­pact wrote: “The gov­ern­ment that in­tro­duced the pol­icy failed to sell it, while its crit­ics por­trayed it as a bur­den that would hurt busi­nesses and cost house­holds. So even though pub­lic sup­port — along with con­cerns for cli­mate change — in­creased over time and the scheme was suc­ceed­ing in re­duc­ing emis­sions, it failed to get the sup­port it needed.”

Crit­ics say the pop­u­lar skep­ti­cism is am­ply jus­ti­fied.

“Gaso­line taxes are one of the most re­gres­sive taxes a gov­ern­ment can im­pose, be­cause ev­ery­one buy­ing gas pays the same price re­gard­less of in­come,” Mer­rill Matthews, res­i­dent scholar with the In­sti­tute for Pol­icy In­no­va­tion, said not­ing the chaos and pol­icy con­fu­sion in France.

Ex­per­i­ment in Wash­ing­ton

In the U.S., the po­lit­i­cal vi­a­bil­ity of car­bon taxes has been put to the test — and found want­ing — re­peat­edly in Wash­ing­ton state.

State vot­ers there last month con­sid­ered yet an­other bal­lot ques­tion propos­ing to place a car­bon fee on fos­sil fuel emis­sions, the third such ef­fort pro­posed for the state.

The pro­posal trig­gered the largest bal­lot mea­sure spend­ing spree in Wash­ing­ton state’s his­tory and in­cluded high-pro­file en­dorse­ments from Mi­crosoft co-founder Bill Gates, who do­nated $1 mil­lion to the cam­paign sup­port­ing the tax.

Sup­port­ers hoped to in­sti­tute the first state-level car­bon fee, which would have taken ef­fect in 2020. All revenue gen­er­ated was to be over­seen by gover­nor-ap­pointed board as well as the state’s util­i­ties.

But op­po­nents also mo­bi­lized against the idea.

CNBC re­ported that the West­ern States Petroleum As­so­ci­a­tion so­licited $31.2 mil­lion from oil com­pa­nies and busi­ness groups against the idea — a record amount for a Wash­ing­ton state bal­lot ini­tia­tive, ac­cord­ing to state records.

In the end, vot­ers in the po­lit­i­cally liberal state re­jected the idea 57 per­cent to 43 per­cent.

In 2016, Wash­ing­ton state vot­ers re­jected a sim­i­lar bal­lot ini­tia­tive that pro­posed a car­bon tax along­side a cut in the state sales tax in an ef­fort to ease the fi­nan­cial bite on cit­i­zens. That bal­lot mea­sure lost 59 per­cent to 41 per­cent.

De­spite the his­tor­i­cal record, green ac­tivists say they have not given up on the car­bon tax idea. Demo­cratic gains in Congress and in state­houses across the coun­try have sparked re­newed talk about the idea, ac­cord­ing to In­side Cli­mate News.

AS­SO­CI­ATED PRESS

Demon­stra­tors set a fire near the Arc de Tri­om­phe in a protest against ris­ing taxes and Pres­i­dent Em­manuel Macron’s other poli­cies.

French Pres­i­dent Em­manuel Macron was at the Group of 20 sum­mit dur­ing the worst street riot in Paris in 50 years.

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