Disclaimer: this article does not include the discussion of whether climate change exists or is man-made, however, for the sake of discussion it is assumed that policy prescriptions can curb the changing of weather conditions across the world.
The violent protests of the “Yellow Jacket” movement in France have shown to the world a dangerous dimension of modern climate change policy – the detriment to society’s most vulnerable and the possibility of class conflict aimed at the environmentally sympathetic establishment. President Macron is currently facing a dramatic uprising of the poor and disadvantaged class in France due to inevitable rises in living costs, a by-product of tax reform disincentives targeting fuel prices. This mixture of environmentalism, rising living costs, disillusionment and conflict exposes a question within how western countries cope with the challenge of climate change – why do policy prescriptions often leave society’s most vulnerable at a significant disadvantage? Moreover, with the Yellow Jacket reactionary movement as an example, is it all worth it?
How and why do climate change policies hurt the poor?
The majority of modern climate change policies involve a tax placed on businesses or households to discourage pollution. Taxation, put simply, is the sacrifice of a portion of an individual or company’s disposable income for the general benefit of the public – through fiscal expenditure by an elected government or higher authority. With climate change policies involving carbon, fuel and general emissions taxes, the completing process of expenditure by a government is virtually non-existent – the primary focus is a disincentive to curb a particular state’s emission of greenhouse gasses. This tax occurs on both a household and business platform, with a penalisation for higher emissions achieved by forking out a price that is contingent with the offensive gasses emitted. It is simple to see the effect on a lower-income household using this system – disposable income deteriorates, families fall further towards the poverty line and other economic issues appear, such as declining aggregate demand. That is, if lower-income households are submissive. On a business level, the unbalancing of a company’s finances due to expensive taxation disrupts the accumulation process, leaving cuts to labour expenditure (workers and wages) extremely vulnerable and extremely possible. This destabilisation of the accumulation process due to unexpectedly large expenditure is even theorised by Karl Marx, as cuts to labour costs occur with the goal of maintaining profits through the surplus-value continuum1. This effect on either strand of climate change taxation provides a clear disadvantage to society’s most vulnerable – through loss of employment or a lowering of disposable income. However, this conclusion involves a fundamental premise that cannot be ignored – does the lower-class care enough about climate change to accept the economic oppression of taxation regimes?
Are society’s most vulnerable disillusioned from climate change?
It is easy for the upper echelon of society to absorb the trickle-down effects of carbon-intensive taxation – although it may sting the weekly disposable income, it does not affect the ability to put food on the table for their families. Accurately put by the Caliph of the Ahmadiyya Muslim Community, Hazrat Ahmad, “… people living in the world’s poorest nations do not concern themselves with the environment, or the latest figures on carbon emissions; rather, they wake up each day wondering if they will be able to feed their children”. The lessons taken from this quote are clear – the political and economic issues of the lower class are on the capital-based area of the spectrum, whilst the complex, armchair-activist scientific area (which reaps little to no tangible rewards in the short term) is dominated by the upper class, “Wentworthian” type. Climate change as a political and economic issue lands itself square in the centre of the latter. On the contrary, multiple scientific reports suggest that the world’s poorest should care about rising temperatures and environmental mismanagement – as they will be the first to receive the negative effects. Research by Environmental and Development Economics (2018) alludes to this by stating that droughts, floods, heat waves and other shocks to agriculture economies and ecosystems will directly harm the poor more than any other economic class2. As both harsh taxes and environmental damage have a significant financial impact on the working class, solutions are desperately needed to ensure that society’s most vulnerable are not bearing the brunt of decisions made by society’s most affluent.
Where to from here?
How do governments find a median point between lowering carbon emissions and helping the environment, whilst not disadvantaging the country’s most vulnerable? French President Emmanuel Macron has caved into the demands of the Yellow Jacket movement3, stating that “(it is) a profound injustice… not being able to provide for the needs of one’s children”. Multiple courses of action have ebbed and flowed throughout the past few decades, with the most popular prescription involving market-based solutions in carbon trading and price capping. In Australia, the Carbon Pollution Reduction Scheme has a tumultuous history of passing and repealing under the Liberal and Labor political parties, however, provides a bright future for dynamic policies that steer away from flat, hefty taxation disincentives.
In conclusion, the use of tax disincentives as a key reliever of climate change is inherently problematic – as the effect on the working class and lower income families brings forth more problems that threaten and destabilise the political and economic system. The lowering of disposable income, loss of jobs due to unbalanced business finances and fundamentally different socio-economic priorities provide a considerable threat to the stability of environmentally sympathetic governance. Western countries will need to assess this problem, using the French Yellow Jacket movement as a lesson to be learnt. Pouvons-nous apprendre des leçons du français! (may we learn lessons from the French – excuse the google translate!).
- Widodo, Tri (2008): Marx’s Capital: the Revolt against Classical Economics. Published in: Aki Ronsou , Vol. 13, (30 December 2008): pp. 23-42.
- Environment and Development Economics (2018), 23, 217–233
- Australian Financial Review. 2019. Emmanuel Macron caves in on fuel tax increases that sparked worst riots in 50 years. Available at: https://www.afr.com/news/politics/world/emmanuel-macron-caves-in-on-fuel-tax-increases-that-sparked-worst-riots-in-50-years-20181205-h18qko. [Accessed 14 January 2019].