Over the past few weeks, France has been gripped by gigantic protests that shaded into riots on several occasions. Apparently they were sparked by French President Emmanuel Macron's attempt to raise the tax on diesel fuel (which has since been rejected), but have morphed into a broad attack on Macron's entire presidency. His approval rating has fallen from 62 percent to 26 percent.
This is an instructive lesson about climate policy. If legislation is going to be big enough to actually get emissions down, it needs a broadly beneficial structure. Conversely, neoliberalism and austerity will destroy any climate program.
So what's going on in France?
A broad-strokes picture of what people are mad about isn't hard to discern. The diesel tax was unpopular because it raises the cost of living for regular French people, without much in the way of compensation — and because French policy previously (and moronically) incentivized the purchase of diesel vehicles.
Meanwhile, Macron is broadly unpopular because he has continued the general trend of neoliberal austerity politics that has failed so abysmally across the entire eurozone. Austerity policy (that Macron himself wrote as economy minister) destroyed the presidency of his predecessor Francois Hollande, who left office with a 4 percent approval rating.
Now, the bumper sticker case for austerity is that by cutting stifling regulations and burdensome public welfare benefits (particularly in heavily-regulated France), you get compensatory growth. The problem is that the growth did not materialize when Hollande pushed through a bunch of austerity — on the contrary, the economy did worse than comparable countries. And as I feared when he was elected, Macron went forward with another round of austerity and deregulation, this time coupled to a giant Republican-style tax cut for the rich:
— JW Mason (@JWMason1) December 4, 2018
As any close student of medieval bleeding remedies could have predicted, sustained growth still didn't arrive, briefly touching a respectable 2.8 percent in 2017 before collapsing down to 1.4 percent by late 2018. Unemployment fell slightly from 9.4 percent to 9.1 percent — but youth unemployment has jumped in late 2018 from 20.1 percent (!) to 21.5 percent.
As for Macron's diesel tax, it was probably a good thing on net, since diesel not only emits carbon dioxide but also deadly particulate pollution. However, the tax was also not remotely sufficient to actually de-carbonize France (which is already a very low emitter, to be fair). The ferocious backlash to this weak policy provides an instructive political lesson.
The basic posture of Macron-style politics is to perpetuate (or worsen) the unequal status quo and occasionally try to make limited progress on social goals like climate change so long as it doesn't upset any wealthy interest groups. It worked well for Bill Clinton in the 1990s — but in an age as economically dysfunctional as this one, it does no longer. Macron only won his election because he faced a quasi-fascist in the final round, and as soon as it became clear what he was all about, most of his voters deserted him.
All countries need very aggressive climate policy, and this kind of triangulating neoliberalism just doesn't have a strong enough social base to hold up — even for meager fuel taxes. Climate policy that is aggressive enough to actually solve the problem means big and profitable companies have to run out of business, and it means energy will (temporarily at least) be more expensive. It needs to be coupled to a dramatic sweetener for the broad population, both to help those struggling to pay higher energy bills and to overcome the certain enraged resistance from the ultra-privileged.
One approach is a carbon tax plus a per-capita dividend. As Anders Fremstad and Mark Paul write, at $230 per ton this would produce a $2,237 yearly dividend — which would more than offset the regressiveness of the tax in the U.S., since rich people emit so much more carbon dioxide than the poor. Despite the cost of gas and electricity going up a lot, the bottom 60 percent of households would end up money ahead, while only the top 20 percent would pay significantly more.
Another approach is that of the Green New Deal being worked up by Alexandria Ocasio-Cortez and others. This would be a more direct re-engineering of the economy away from carbon energy centered around Keynesian logic. Since there is almost certainly still some economic slack (and we may be facing a recession soon), the government would spur employment and production by a gigantic investment in renewable energy, electrification of transport and heating, a direct attack on fossil fuel production, and so on. Instead of using markets to make carbon power more expensive, this would instead use state power to achieve that directly, while bashing inequality and working on lots of other useful social goals.
Now, these two approaches don't necessarily trade off and could be combined in various ways. The point is that they both have ways to provide broad offsetting social benefits that would compensate for the pain of beating down Big Carbon power. Macron-style neoliberalism just isn't going to cut the mustard.
Do you want riots? That's how you get riots.
Editor's note: A previous version of this article misstated France's economic growth rate. It's been corrected. We regret the error.