Politicians know what they have to do, but must beware the ‘gilets jaunes’
Philip Stephens
© Ingram Pinn/Financial Times
“We all know what to do, but we don’t know how to get re-elected once we have done it.” Jean-Claude Juncker, then Luxembourg’s prime minister, issued his painfully prescient warning in 2013. Sure enough, the austerity programmes that followed the global crash whipped up a populist storm from which the old politics has still to recover.
History is in danger of repeating itself. As Mr Juncker might say, the politicians know what they have to do about climate change, but beware the gilets jaunes.
The success of the populist movements that have destabilised Europe’s ancien regimes is rooted in a perception, more than half-true, that those near the bottom of the pile were burdened with bailing out the elites responsible for the financial crisis.
The left-behinds rather than the bankers bore the brunt of austerity. Now think about cutting carbon emissions. The same group — low earners living in provincial towns and villages — are first in the line of fire.
Pace Donald Trump’s appearance at Davos, the phoney war about the climate is over. One way or another global warming is set radically to reshape our economies and societies. Public opinion will no longer let politicians get away with a few fine words, a handful of wind farms and tax incentives for electric cars.
Raging bushfires in Australia, melting glaciers in Greenland and unnerving shifts in weather patterns almost everywhere have disarmed all but the most obstinate climate deniers. Ask Scott Morrison, the Australian prime minister, who not so long ago exulted in his role of chief cheerleader for Australia’s coal industry.
Business is also discovering that a token nod in the direction of sustainability is insufficient. As ever, there has been an abundance of hot air in Davos, but corporate boards are also feeling real pressure to take global warming seriously. Shareholders and stakeholders want to know how the boards are making their businesses climate friendly, investors are beginning to shun the fossil fuel industry and companies large and small are being asked to produce green audits.
None of this makes the politics any easier. Even if the pledges made by dozens of governments to reach a net zero carbon world by 2050 look hopelessly ambitious, the promised policy upheaval is immense. Tax codes will have to be rewritten from scratch.
Businesses will have to measure and reduce carbon content at every point in their supply chains. Financial institutions are already under pressure to cut their exposure to fossil fuels. Before long every company will be rated on its carbon footprint.
Motorists will struggle, however, to accept that the internal combustion engine has had its day — at least until someone invents a cheap battery with a decent range. The switch from coal, oil and gas to sustainable energy will require the replacement of hundreds of millions of household heating systems. Cheap flights will disappear.
A shift from consumption of meat to plant-based products will not invite universal applause. Nor will the tax increases needed to finance decent public transport and better insulation of buildings.
The way to make this palatable, politicians think, is to wrap up the changes in “green deals” — huge packages calculated to harness public and private money, recalibrate taxes, subsidies and other incentives and compensate the biggest losers. Only this month the European Commission unveiled a €1tn programme to map the path to carbon neutrality by 2050. It is a bold project, including hefty compensation for the big losers from shutting down fossil fuels production as well as tougher regulation and a cross-border carbon tax.
But no one, as far as I can see, has come up with plans to offset the cost of this on the people it will hurt most — those who need to drive to work in the ancient, gas-guzzling cars that spew out the most carbon; the householders least likely to have decent insulation or the cash to replace fossil fuel boilers; and the people for whom cheap air travel means a chance to take their one annual holiday.
These are the voters to whom Mr Trump was speaking in Davos — the same ones who have fuelled the rise of populist parties of the far-right and left across Europe.
Most often they live in small towns and villages beyond the big cities where sustainability has become a fashion statement. If anyone doubts their anger, they need only look at the gilets jaunes in France, whose year of protest against Emmanuel Macron began with an increase in fuel taxes.
There are a few obvious ways to soften the impact. Better, subsidised public transport in provincial towns would be a start. Governments can also finance scrappage schemes to encourage people to swap to smaller, fuel efficient cars, and offer grants for sustainable heating systems. But they should know halfhearted handouts will not be enough.
A large swath of voters look at green policies through the same prism as Mr Trump — something that wealthy globalists inflict on the poor when they are not hopping from continent to continent on their private jets. In their own minds, the left-behinds have already been swindled by globalisation and robbed by the bankers.
They are in no mood to be cheated again. The question I have is whether the liberals leading the decarbonisation charge are ready to finance the big income transfers needed to make it politically sustainable.
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