Aoday more than ever, we sell and consume goods and services whose production and trade generate significant CO emissions.2, which urgently needs to be reduced. Now, whether the ideologues like it or not, there is no simple solution to this problem.
Firstly, providing all of Europe with a carbon-free energy mix is still only a distant dream. Secondly, being able to produce and move around without degrading the climate will require very heavy investments and supplies of critical materials and raw materials, for which we are already seeing new dependencies appear.
Finally, these investments will inevitably be passed on – at least in part – to households, for whom any price increase is difficult to accept and translates into a drop in demand.
A precious asset, with multiple virtues
If the gradual increase in the price of carbon seems to be an effective solution, here again it is a question of being cautious. As we have just shown in a study just published, an increase in the price of CO emissions2 up to 250 euros per tonne – an order of magnitude considered barely sufficient by climate specialists – will be both likely to weigh heavily on households (between 20 and 25 billion per year simply for the consumption of goods and services, excluding specific taxation), but also to plunge into serious difficulties entire sectors such as air transport and aeronautics, steelmaking, basic materials, etc. (study “Carbon pricing and its repercussions. Sectoral exposure to additional carbon costs”, Olivier Sautel, Caroline Mini, Hugo Bailly and Rokhaya Dieye, La Fabrique de l’industrie and Deloitte, Presse des Mines, 2022).
A common mistake is to think that France and its European partners have hedged against this risk since they rightly equipped themselves with a carbon border adjustment mechanism. La Fabrique de l’industrie has clearly shown this: this mechanism, still very partial and which will have to be extended despite its technical nature, protects against extra-European environmental dumping, but not against the reductions in domestic demand induced by an increasing price of carbon, which must therefore be anticipated and supported.
In this context, it is urgent for France to reflect on its dependencies, energy to begin with. Despite the questions it raises, it seems obvious that its nuclear power plant is a precious asset, with multiple virtues: competitive and low-carbon electricity, energy autonomy, etc. The Ukrainian crisis shows in a particularly clear way the need to reduce energy dependencies.
You have 43.66% of this article left to read. The following is for subscribers only.