Grandstand. The latest report of the Intergovernmental Panel on Climate Change (IPCC), published on April 4, clearly states that humanity has three years to put in place “rapid, deep and mostly immediate greenhouse gas reductions across all sectors”, so as not to exceed 1.5°C of global temperature rise. The year 2021 has indeed marked records in terms of CO concentration2 in the atmosphere and global warming.
While it is established that the production and consumption patterns of developed countries contribute greatly to these disruptions, the externalities of our economic system – namely its impact on the environment – are very little integrated into the final price paid by consumers. While it is urgent to transform our economy, how can we reconcile our behavior as consumers with this vital requirement? Without giving an exhaustive answer to this question, the European Commission is in the process of providing States with a weapon for the massive transformation of our model: the possibility of lowering VAT based on environmental criteria.
In concrete terms, the European institutions are in the process of reviewing the VAT Directive, in application since 2006, the purpose of which is to ensure that the markets of each Member State are based on common tax rules. This revision will open the right to exempt from VAT products deemed to be environmentally friendly (by the way, this revision will also mean that France will not be able to apply reduced rates on “natural” gas and wood heating).
Mismatch
This development is crucial. Indeed, the “yellow vests” crisis has shown how difficult it is in France to introduce a carbon tax on polluting products, particularly diesel. This crisis has demonstrated the inadequacy of our social and territorial organization with the ecological emergency: the planet is burning, but it is still difficult for many people to get to their work or to their places of sociability without their car; to fill their refrigerator or even to dress without buying products whose preparation, transport and distribution destroy our planet.
Although ecological awareness is spreading, as evidenced by the place of this subject in the concerns of the French, it is always cheaper to consume products with a high environmental footprint than products that respect the environment. However, the environmental VAT is in this sense an anti-carbon tax: instead of increasing the prices of polluting products, it lowers the prices of products that respect the environment. It finally allows you to align your consumption choices with your ecological convictions.
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