Public policies and transition:

Ambitious objectives call for ambitious means

The challenge of climate change calls for a profound transformation of our societies. If the State has within its reach a varied and powerful economical toolkit to achieve its goals, can it implement emergency climate policies without reinforcing social inequalities?

In April 2021, the European Commision raised its ambitions to reduce greenhouse gas emissions. When the target was set at 40% reduction for 2030, it became 55%. “It was already an objective difficult to reach,” says Quentin Perrier, head of studies for the High Council on Climate (HCC). “Now, the real question is to know how to implement policies to get there”. To the economist, a transition cannot be successful if the state isn’t the driver. “Without incentives, that is, standards and regulations, there is nor reason for habits to change. Reaching our goals can only happen through a profound and major systemic transformation”.

And the state has a large number of tools available, with very diverse impacts on society. “There are several levers: taxation, which has been much referred to, but also public investments, standards and the access to information for consumers.” These tools are often complementary to achieve an objective. For example, standards can ensure that vehicles entering the market are more efficient, and ban those having a too high consumption of fossil fuels. Associated with the bonus-malus approach and public investments favoring alternatives to individual cars, new standards can entice citizens to change their modes of transport. This dynamic is also supported by the legislative horizon established by the European Commission, ending the sales of thermal vehicles by 2035.

The right balance

Another strong fiscal lever regularly attracts critical glances: taxation. Enforcing a polluter-pay principle, the carbon tax appears to many economists as an effective way to reduce greenhouse gas emissions. For Quentin Perrier, even if it has benefits, “this approach cannot work on its own. It is a powerful lever, but can create inequalities. For instance, an individual using his car for commuting to work undergoes a carbon tax, but it is not the case for a plane ticket”. Thus, the price of carbon in France varies depending on sectors, generating a sometimes strong sentiment of injustice among the most precarious citizens.

“This transition can only work if the same rules apply to all” states the economist. “The ‘Yellow vest’ crisis was an electric shock on this matter. Since, it is impossible to think about public policies without talking about redistribution and social justice.” If several modes of redistribution are mentioned to cut these gaps, they do not suppress them completely: the diversity of situations makes it hard to grasp and therefore to compensate financially. More broadly, the success of a public policy holds in the balance between incentive and punitive, and their diversity allows for a fair distribution of efforts expected from citizens. “It is a difficult balance to find, and regards political choice” concludes Quentin Perrier.

Translated from Marion Barbé for IPSL