The use of the carbon tax to encourage behavioural change, which most economists consider to be the most effective policy, has faced public hostility in recent months, pointing in particular to the lack of accessible low-carbon alternatives for travel and to household budgetary constraints. Beyond the mechanical application of a price trajectory, these claims invite us to reconsider the limits of the carbon pricing approach to transform society and to identify the conditions for a sustainable evolution of this tax taking into account both the demand for social justice and the environmental objectives to be achieved - carbon neutrality in 2050.
Key Messages
- Against the idea that a pause in the rise in the carbon price would weaken environmental taxation and, ultimately, the implementation of ecological transition, this Policy Brief stresses that this pause can be used to restore confidence in the necessary long-term tool of the carbon tax and rebuild a solid foundation for ecological transition in France.
- The practical application of the carbon tax, which is ideal in theory, raises difficulties that show the importance of having low-carbon alternatives that can be mobilized for stakeholders, otherwise an increase in the carbon price will result in a reduction in well-being, especially for the most constrained households.
- An international comparison shows that the tax increase in France has already had a significant impact on fuel prices, in particular more significant than in Sweden or British Columbia (Canada), often cited as examples of successful carbon taxation.
- 4 priorities should guide government action during this break: (1) strengthen capacities for change by financing transition; (2) preserve household budgets by paying them an annual "energy transition premium"; (3) rebalance the contribution of all sectors to transition; (4) provide clear opportunities for sector development to achieve carbon neutrality.
