An exceptional levy on the financial heritage of the wealthiest households, the solution was released in the report by economist Jean Pisani-Ferry submitted to the government at the beginning of the week in order to assess the macroeconomic impacts of the ecological transition in France.
It was the Prime Minister, Elisabeth Borne, who had entrusted this mission to assess all the efforts to be made in the fight against global warming. ” To achieve our objectives for 2030 and thus aim for neutrality in 2050, we will have to do in ten years what we have struggled to do in thirty years. The acceleration is brutal, all sectors will have to play their part warns this report from the outset.
Between 25 and 34 billion euros per year to find
By 2030, the transformation would be based mainly on the substitution of capital for fossil fuels, sobriety only contributing to less than 20% of the reduction in CO2 emissions. Consequently, over the next ten years, the report estimates that decarbonization will call for additional investment of more than two points of France’s GDP compared to a scenario without climate action. This corresponds, for example, to an overall investment of 67 billion euros in 2030. More specifically, the additional public expenditure induced by the climate transition is estimated at between 25 and 34 billion euros per year by 2030.
Renovation of housing and buildings, public research, aid for investment and equipment for households and VSEs, subsidies for deep decarbonization of industry, vocational training, support for retraining… the list of necessary investments is long to finally place itself on a trajectory of climate neutrality. Not to mention the drop in revenue based on carbon energy taxes, which we know are heavy…
A new wealth tax?
To finance such amounts, it is impossible not to use public debt, but there will of course be limits that should not be crossed, particularly with regard to European rules. We therefore arrive at a temporary increase in compulsory levies which would be centered on the financial assets of the wealthiest households. The report mentions an exceptional fixed levy of 5% on the financial assets of the 10% best endowed, which would bring in 150 billion in 30 years (i.e. 5 billion per year). The net financial assets of households were indeed 4,700 billion euros in 2021, including 3,000 billion for the wealthiest 10%. It has probably increased significantly since then. Behind this concept of a new wealth tax, there would then be a whole wealth tax system to be reinvented.
A less unequal transition
For Jean Pisani-Ferry, it would also be a way to make this transition less unequal as it has been shown that the richest contribute more to global warming. As noted in the previous thematic report “Distributive issues”, the emissions from air travel alone by the wealthiest households (tenth decile) are on average equivalent to the emissions from all travel by the poorest households (first decile) . ” Quantitatively, what may seem to be the privilege of some therefore has the same consequences for the climate as what is essential for others. concluded the authors of this study.
Finally, the most modest households do not always have the means or the possibility of borrowing to participate in these investments for the future, as we see for example for the renovation of housing or the transition to electric vehicles.