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“The elites are talking about the end of the world, while we are talking about the end of the month.” So lamented one gilet jaune protester in France in 2018 after President Emmanuel Macron tried to raise fuel taxes. Citizens in multiple countries are now expressing similar sentiments as governments strive to accelerate climate change efforts amid a cost of living crisis and rising interest rates. If the pains of pricey and disruptive green initiatives go unaddressed, a rising political backlash could slow the push towards net zero even further.
The partisan divide over climate change policy has been widening in the US. In Europe, too, politicians on the right have been exploiting concerns over the costs of green measures to gain electoral advantage. In Germany, a bill that in effect bans the installation of gas boilers next year, in favour of heat pumps, has caused outrage due to the expense and the tight deadline. Wider EU proposals to retrofit homes have also hit political resistance.
Britain’s Conservative government has been accused of backsliding on its climate agenda after it offered more allowances to polluting industries under its carbon trading scheme and this week backed the granting of hundreds more North Sea drilling licences. Prime Minister Rishi Sunak has portrayed himself as the motorist’s friend since the party won a London by-election last month after its candidate campaigned against the Labour mayor’s plan to extend a charge on heavily polluting vehicles.
Governments are learning they cannot take public support for green issues for granted, especially when policies begin to impose costs and inconvenience. If environmental steps become a political wedge issue, a speedy transition — which will rely on cross-party and broad public backing — will be hard to sustain. The answer should not be to dilute or backtrack on the necessary policies. Governments instead need a better strategy.
For starters, a clear, long-term road map is important. Households and businesses need ample notice of measures, say, to restrict certain types of vehicles, or heating or power sources, so they can plan ahead. It would help governments too. Politicians in many countries are only contemplating accelerated — and disruptive — energy efficiency improvements to buildings now, for example, after dithering over it for years.
Better communication is crucial too. Information on green measures must be accessible and widely publicised. Policy messaging also needs to be targeted to the audience. Some people may be more receptive to the virtue of going green, but others need a clearer sense of the upsides, be those health-related or financial, before they will act. The Biden administration’s Inflation Reduction Act did well to emphasise its boost for jobs, growth and national security.
Costs of green measures also need to be levied as proportionately and progressively as possible. Carbon pricing is a useful mechanism as it entrenches a “polluter pays” principle. But the less well-off may still find it harder to adjust. Green tax revenues can be used to offset some of the burden on the most vulnerable through tax cuts or targeted grants.
Not all costs can be offset, so incentives will play an important role too. Tax credits for energy efficiency measures and green technologies can be effective. The right environment must be created, including widespread electric vehicle charging points and better public transport. And for those whose jobs are directly under threat from the transition, retraining schemes are essential.
With air and sea temperatures hitting alarming records, governments need to act with haste. But if the near-term costs are not managed carefully, long-term climate goals will slip even further away.
