Emmanuel Macron has set the course. By 2027, France will have finished using coal. It will have built a million heat pumps and produced as many electric vehicles. But in the speech of the Head of State, there is no allusion to Europe and its progressive carbon pricing. No mention either of the end of fossil fuel subsidies or of the inflationary effects of the carbon tax at the Union’s borders. Logical, believes economist Christian Gollier. Transition policies often have things left unsaid. We even live in a utopia of happy energy transition, forgetting that this will impact the purchasing power of households.
L’Express: What are, in your opinion, the major subjects forgotten by Emmanuel Macron during his intervention?
Christian Gollier: We can already mention Europe and this is no coincidence. The European Union is gradually implementing carbon pricing mechanisms, with already concrete effects. For example, if the price of electricity has been so high for some time, it is partly because the price on the market of CO2 emission permits – reserved for companies producing energy – has increased by 5 in two and a half years. More precisely, we went from €20 to €100 per tonne. This massive increase impacts the marginal cost of electricity production and therefore the spot market. At the end of the chain, French consumers pay more for their electricity.
Few of them are aware of it, but in 2027 we will take a further step since a similar carbon pricing mechanism will affect the mobility and transport sector. Very concretely, this concerns the consumption of gasoline at the pump, that of domestic fuel oil and natural gas used for heating… European politicians are being cautious: they have planned to cap prices on this new market in order to avoid a social movement similar to that of the yellow vests. However, this mechanism is much more difficult to get across to populations than a subsidy for the thermal renovation of buildings, the costs of which remain hidden since it involves public debt. We understand that Emmanuel Macron wishes to avoid broaching the subject. But today, we are in a situation where the reality of the costs of the energy transition is being hidden from the French.
So this will be more expensive than we think?
Absolutely. We collectively live in a utopia maintained by political parties. That of a happy energy transition in which we will create many jobs while reducing the amount of the electricity bill. However, in reality, to reduce our CO2 emissions by 55% by 2030, we have just over six years left. When we look at the possible options, most generate very significant costs that will have to be paid by one or the other. There is no Ali Baba’s cave full of treasures to finance the whole thing. Beyond the probable consequences on household purchasing power, we will have to make efforts that undermine our comfort. I am thinking, for example, of using public transport instead of the car, traveling by train instead of the plane, reducing the temperature of apartments in winter… It is difficult to obtain the support of the French in these conditions. Emmanuel Macron must, in addition, take into account the rise in interest rates which risks increasing the debt. Its room for maneuver is therefore reduced to finance the transition.
Could household access to electric vehicles still pose a problem in 2035?
We cannot exclude it. It is not certain that, by then, we will be able to sufficiently reduce the costs of the essential elements of electric cars, especially if we have to face real bottlenecks on certain raw materials like lithium. Therefore, it is not certain that we can reduce the cost differential with thermal cars. At the same time, the price of a barrel of oil will not necessarily remain high. The day oil producers understand that Western countries actually want to reduce their emissions by 55% by 2030 and then move towards net zero emissions in 2050, they will seek to sell off their stocks before it is too late. , which will lead to a drop in prices.
Of course, we are not there yet. In 2023, there has never been so much demand for oil in the world. Prices therefore remain high. But in 2035, it is not impossible to have both expensive electric cars and cheap oil. How can we force, in these conditions, low-income households to invest in carbon-free mobility? We could then have an even larger yellow vest movement than in the past. In fact, there are a lot of unthinking in climate policies. And so far, we have spent a lot of public money without necessarily creating the right incentives.
Are you referring to persistent subsidies on fossil fuels?
They still represent 6.5 points of global GDP. It is enormous ! Of course, the situation varies from country to country. But generally speaking, tax loopholes abound. In Belgium, for example, many households use company cars and thus benefit from a discount on the price of gasoline. In France, we subsidize fishermen who use fuel oil for their boats. An absurd decision! If we really want to support the purchasing power and attractiveness of the fishing profession, it is not by encouraging them to consume more gasoline, but by giving them a check as we have been able to do in the past to Farmers.
Could the carbon tax at Europe’s borders undermine the purchasing power of households?
Highly possible. You should know that politicians often sell border taxes as something protective. They tell us that it is the importers who will pay it. But in reality, the measure most often results in an increase in prices in the importing countries, that is to say those which impose the tax. It is therefore likely that French consumers will suffer a cost linked to changes in European regulations. This isn’t necessarily a bad thing. This increase in prices should encourage households to reduce their consumption of high-carbon products. But for the moment, we are hiding from them the effects of this policy on their wallets.