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What Are The “Yellow Vest” Protests?

The “Yellow Vest” (Gilets Jaunes) Protests began as a movement protesting the increase in fuel taxes in France. In late October of 2018, President Emmanuel Macron announced a green tax on fuel to go in effect January 1 of 2019 as part of his efforts to pay for clean energy initiatives. This green tax includes a fuel tax hike set of seven euro cents for diesel fuel and three cents for unleaded fuel. This tax increase incited months of protests beginning in the provinces of France and moving widespread to Paris. The initial protest consisted of French drivers blockading major motorways and petrol depots every Saturday. Though most protests are peaceful, some have turned violent; the protesters have vandalized the Arc de Triomphe and the Tomb of the Unknown Soldier in addition to damaging buildings, raiding shops, and coming into physical contact with the police. This weekend marks the 21^stconsecutive Saturday with active Yellow Vest protests.

Who Are The Protesters? What Are They Protesting?

The protesters were originally French citizens living in rural areas. These citizens began the protests because they regularly drive long distances and were principally affected by the fuel tax and claimed to not be able to afford it. The protesters further claim that this tax disproportionately affect them as the upper class members of society have the means to purchase electrics cars meanwhile they do not and are the ones paying for the tax. Furthermore, the elite live in cities and do not rely as heavily on cars for everyday transport as those living in the rural areas do. This initial demographic grew to encompass members of the working and middle classes who were similarly frustrated with the state of the nation and could not keep up with the rising costs of living. The movement further developed into a backlash against President Macron as the working and middle class citizens have the perception that he is a president of the rich after he loosened labor laws and wealth taxes while increasing green taxes which hit this particular demographic.

The protesters are nicknamed for the yellow safety vests worn during the demonstrations. This defiant uniform came about because French law requires all citizens who operate vehicles to carry yellow roadside safety vests in their vehicles incase of emergency. Protesting drivers wore these vests as it is a symbol of the green tax affecting them personally, however now anyone joining the greater protest against the government wears the yellow vest.

What Do They Want?

The tax hike was the initial spark that ignited a general disgruntlement within the French society. The initial movement was targeting the repeal of the green tax on fuel. The protests claim that the taxes disproportionately affect the lower and middle classes, and that French leadership is out of touch with the needs of the working class. The cost of diesel in France has increased about 20 percent in the past year, hitting the wallets of the protestors unequally to the general population and upper classes. However, once working and middle class citizens joined the movement the demands had been raised to include increasing the minimum wage and pension benefits, to dissolve the reigning National Assembly and hold new elections for true representatives of the people, and even for Macron to resign as the President of France. At large most protestors are crying for a change in government policies which are viewed to be favoring the rich. These protests are apart of an economic and social justice movement.

Why Do They Pose a Challenge for Green Taxes At Large?

The protests have been going on for months now and have begun to get increasingly violent to the point where the government has considered declaring France to be in a state of emergency. Accordingly, President Macron has delayed the planned green tax for six months which shows how hard it can be to put environmental policy into place. When Macron announced the tax hikes he explained that while it is unfortunate that people have to pay for the measures in the present, the procedures were necessary to combat climate change and protect the environment. This reveals a hesitation for our generation to feel the future approaching with a near minded focus on the present and generally discounting the future too much. The median citizen has only seen environmental action in the face of punitive measures and taxes and thus is not convinced of its virtue,

This poses a threat to the future of environmental taxes at large since the single most effective tool in the fight against climate change is the tax code. While taxing the producers of certain emissions sounds fair and effective in reducing emissions, the Yellow Vest Protests reveal the societal and structural flaw in that train of thinking and illustrate just how politically explosive these taxes could be. Other nations such as Canada, Australia, and the United States have similarly found it hard to secure public support for green taxes. It is a struggle for governments to combine ecology and equality and find fair ways to save the environment. Prime Minister Édouard Philippe has said “No tax is worth putting in danger the unity of the nation,” but what does that mean about the future of our planet?

Mitigating the Financial Repercussions of Green Taxes for Low-Income Citizens in Europe

Environmental taxes, also known as green taxes, function as a means to reduce emissions and the consumption of environmental resources by making these resources more expensive for consumers to use. While governments across Europe are taking initiative to reduce their carbon footprints in defense of the planet, these economic charges often produce financial repercussions for citizens who are low-income, and thus, in a lower tax bracket. As observed in the case of Gilets Jaunes, or the Yellow Vest Protests, citizens from rural areas of France mobilized to protest the implementation of fuel tax policies that have generated disproportionate financial impacts on citizens with lower incomes. Utilizing a case study of the United Kingdom’s environmental consumption and green tax policies, the following assessment will summarize the ways in which the countries across Europe can enforce green taxes in a manner that reduces the financial repercussions of these tax policies on low-income citizens in their respective territories.

Case Study: The United Kingdom

In the United Kingdom, environmental policy makers are researching the impact of green taxes on low-income households in four primary areas of environmental consumption: energy use, water use, transport, and generation of waste. In the UK, the average low-income household’s utilization in these four areas is found to be disproportionate to the overall household income. Research indicates, however, that the consumption of environmental resources varies from household to household, and thus, some low-income households will experience a net loss with the onset of any green tax. As such, a flat rate tax, as observed in the case of Gilets Jaunes, would be regressive and detrimental to low-income households. In substitution of a flat rate tax, policy makers have offered solutions in the four key areas of environmental consumption that will aid in reducing negative impacts on low-income households.

Household Energy Use

Research indicates that the variation in household energy use and the production of carbon emissions varies greatly. In addition, many low-income households in the United Kingdom experience fuel poverty, which necessitates spending more than 10% of earned income in order to achieve a suitable amount of warmth. In exploring a multitude of policy solutions including means-tested benefits, child benefit, adjustments to the Winter Fund Allowance, and varying the carbon rate tax, policymakers have determined that the most politically feasible and beneficial green tax policy is to incentivize cost-effective-energy-efficiency measures for non-fuel low-income households. As such, households (beginning with the highest-valued houses in each region) would be asked to have an energy audit of their home conducted, and those households who have not successfully implemented cost-effective-energy-efficient standards by the end of the audit year would be subject to a ‘climate change surcharge.’ Policymakers purport that this policy measure could eliminate fuel poverty, produce carbon savings of four million tons of carbon over the span of ten years, and save households upwards of 20 billion pounds net present value for an investment of 6.4 billion pounds. In addition, this green tax policy could pave the way for the imposition of a non-regressive carbon tax, which would ultimately reduce household carbon emissions in the future.

Household Water Use

An assessment of international water usage and costs found that current policies in the UK are more regressive and oppressive for low-income households than in any other industrial country included in the research investigation. Policymakers have suggested the implementation of universal water metering through the variation of different taxes. The examination of eleven different tariff alternatives revealed that enforcing a lower tax on water for households receiving government benefits, allocating ‘free’ allowance of water for some households, and the variation of tariffs regulated in accordance to figures outlined by the Council Tax, would all result in reduced regressivity in comparison to current tax policies.

Household Transport Use

In assessing the distributional effects of potential tax policies that could reduce the increase of transport related emissions, researchers examined the following strategies: increasing fuel duties and abolishing vehicle excise duty (VED), increasing fuel duties and using the money to subsidise public transport, increasing fuel duties and using the money to increase benefits, reform of graduated vehicle excise duty (VED), introducing a graduated car purchase tax, congestion charging, and introducing domestic tradable quotas (DTQs). Research determined that the best measures for reducing transport related emissions and the disproportionate impact on low-income drivers at the onset would be an abolishment of VED, or alternatively, the introduction of a progressive car purchase tax which would serve to replace a graduated VED. In terms of reducing fuel usage, the best policy strategy would be the introduction of domestic tradable quotas that monitored motor and aviation carbon emissions. With this strategy, every adult citizen would receive an equivalent amount of carbon units to encompass their annual carbon emissions, which would include private transport. Citizens who utilize less units than their given amount would have then have the opportunity to sell their surplus units to those who need more.

Household Waste

The examination of recycling and waste disposal rates across the EU found that on average, the UK recycles at a lower rate, and produces larger amounts of waste that are sent for disposal at landfills. At present, households must pay for waste collection and disposal through the Council Tax, however, this practice is regressive and thus disproportionately impacts low-income households. Current potential measures to reduce household waste suggest the introduction and increase of variable waste charging, which would only serve to further negatively impact low-income households. Alternatively, policymakers have suggested the introduction of a ‘revenue-neutral, variable, weight based’ charge for all households, in which adequate compensation would be allocated to those receiving means-tested benefits to offset the additional costs of waste disposal. This would serve to ultimately reduce the regressive effects of a waste-disposal charge implemented by the Council Tax.