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Carbon Taxes at the Barricades

The "Yellow Vest" protests in France have been an eye-opening experience for those who advocate carbon taxes as a means to combat global warming. Unless political leaders demonstrate greater sensitivity to the distributional impact of climate-change policies, public support for them will be difficult to sustain.

LONDON – For governments everywhere, the shadow of the gilets jaunes (“yellow vests”), whose protests wracked France for several Saturdays before Christmas, now looms over policies to combat climate change. In the face of street violence, President Emmanuel Macron has canceled a planned increase in the diesel tax. Other countries’ officials will take note, and auto and oil industry lobbyists are – no surprise – urging them to be warier.

But many of the demonstrators are avowedly not opposed to action on climate change. Among the multiple demands of this bottom-up and disparate street movement is a call for higher taxes on aviation fuel rather than on diesel. Action to address climate change, participants argue, is being pursued at the expense of those least able to bear the cost.

They have a good point. Macron’s policy was a perfect example of how not to impose higher carbon taxes. It was introduced with insufficient consideration of its impact on income distribution and the wider economic and political context.

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