Chronic. Failing to reach the second round, Jean-Luc Mélenchon succeeded in imposing his flagship theme, ecological planning, which Emmanuel Macron took over by announcing that he would directly charge the Prime Minister with it.
The expression is surprising: the last French plan ended in 1992. But, above all, it has long been said that the ecological transition would be based on the market. Economists kept saying that the role of governments was not to play the conductor, but to put a price on carbon. The rest – choice of technologies, sectoral specialization, consumption, lifestyles – would be the responsibility of private agents. The state would set the extent and pace of the transformation, the market would determine the terms.
This beautiful architecture has come undone. In France, the increase in carbon taxation has been suspended since the end of 2018; in the United States, Joe Biden has given up this instrument; in the rest of the world, the corresponding revenues are nine times lower than fossil fuel subsidies, according to calculations by the Institute for Climate Economics. Admittedly, the European market for allowances works, and the EU plans to extend it. But it will be, at best, only a partial instrument.
The primary reason for this failure is deep social hostility to carbon pricing. This is not without foundation: in France, in 2019, only a quarter of the proceeds of new taxes were to be redistributed to households. But even full restitution, for an equal amount, is seen as unfair. For those forced to restrict themselves by the price of fuel, fairness demands that the wealthiest be forced to give up their weekends in Rome. Not to increase the price.
Models of yesteryear
There is worse. If we want companies and households to invest in order to reduce their emissions, it is not enough to fix the price of carbon for today, it must also be programmed for twenty years from now. However, rulers cannot tie the hands of their successors. And when they do, that does not prevent the State from backtracking: in 2013, the abandonment of the heavy goods vehicle ecotax cost it 1 billion euros in compensation. This lack of credibility greatly weakens the instrument.
Still necessary, the price of carbon will therefore no longer be the cornerstone of the climate strategy. The State will act more by regulation, subsidy, investment, and assume responsibility for technological, territorial or social choices. This is basically normal: between nuclear and renewables, between electric mobility and hydrogen, between metropolisation and the revival of medium-sized towns, the decision belongs to society. In an economy where the choices of each weigh on all, we must rethink the role of public power. And so, yes, plan. The question is how.
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