The investments needed to decarbonize the French economy will slow growth and increase public debt in the years to come, according to a report published Monday by France Stratgie, which plans to tax the wealth of the wealthiest.
Replacing the use of oil, gas or coal with renewable energies and nuclear energy will be based 85% on the substitution of capital for fossil fuels and only around 15% on efforts at sobriety, such as lowering the temperature of heated rooms or move less, according to this report by the government think-tank France Stratgiecommissioned by Prime Minister Elisabeth Borne and economist Jean Pisani-Ferry.
Thus decarbonization will call for an additional investment of 66 billion euros per year in 2030, says the document whose rapporteur is the Inspector General of Finance Selma Mahfouz.
The report is made public as Elisabeth Borne presents her plan on Monday to accelerate the reduction of greenhouse gas emissions from France. To achieve our objectives for 2030 of reducing emissions by 55% compared to 1990 and thus aiming for neutrality by 2050, we will have to do in ten years what we have had difficulty in doing in 30 years, underlines the document.
The economic cost of the transition must be equitably distributed
And the investments needed to limit global warming will not make it possible to produce more, or more efficiently. On the contrary, they will initially lead to a slowdown in growth.
An increase in compulsory levies will probably be necessary
Moreover, the economic cost of the transition will only be politically and socially accepted if it is equitably distributed. Also, to support households as well as businesses, public finances will be called upon to make a substantial contribution to the effort.
Due to new spending and the slowdown in growth, the risk that the energy transition poses to public debt is around 10 points of GDP in 2030 (i.e. at least 280 billion euros, editor’s note), 15 points in 2035, 25 points in 2040, according to the report which judges however that it is useless to delay the efforts in the name of the control of the public debt.
An increase in compulsory levies will probably be necessary, according to the authors who believe that it could be sitting on the financial wealth of the wealthiest householdswhile specifying that it could take the form of a exceptional levy, explicitly temporary.
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