“The climate is a good reason to go into debt because it is something that will produce effects” assures Jean-Pisani-Ferry responsible for assessing the economic impacts of the ecological transition.
“We will have to make a lot of investments to decarbonize the economy”, alerted Monday, May 22 on franceinfo the economist Jean Pisani-Ferry professor at Science Po, commissioned by the Prime Minister to assess the economic impacts of the ecological transition, while the Prime Minister presented France’s new plan to curb greenhouse gas emissions. “To reach our 2030 targets, we need to double the rate of reduction in our greenhouse gas emissions“, affirmed Elisabeth Borne.
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Jean Pisani-Ferry, author of a report on the financing of the measures to be implemented, says to himself “not at all pessimistic about the medium term for after 2030“. He estimates that “the climate is a good reason to go into debt because it is something that will produce effects“.”Why not ask the wealthiest 10% to make an effort?“, asks the economist.
franceinfo: According to your report, the energy transition is possible but it will have a cost for France in the short term.
I am not at all pessimistic about the medium term for after 2030, because I think that there is new technical progress available, that we are not at all forced to choose between climate and growth. On the other hand, we cannot hide the fact that, in the immediate future, we will have to make a lot of investments to decarbonize the economy. And these are investments that will not have a positive impact on growth potential, for the simple reason that companies or households, instead of investing to improve their performance, to improve their well-being, will invest to dispense with fossil fuels.
What will be the estimated cost of this energy transition?
It’s between 65 and 70 billion per year by 2030. So that’s roughly two points of gross domestic product, which is important.
Who will bear this cost?
In part, it will of course be companies, wealthy households, therefore those who have the capacity to bear this cost. But public finances will have to bear part of it. First of all, of course, everything that falls to public administrations, for example the maintenance of buildings, the thermal renovation of schools and public buildings. And then, we will have to help households, not only low-income ones, but even middle-class households. Because, when you look at what the thermal renovation of a home or the change of vehicle costs, it costs the middle class about a year of investment income. So that’s a lot. And that, you can’t tell people”do it“. We will have to support them.
Is that why you propose in this report, to tax the wealthiest, a sort of climate wealth tax?
I am looking for funding. The first financing is obviously the redeployment of brown expenditure. There is still in the State budget, between expenditure and tax expenditure, 10 billion brown expenditure per year. It is the first source of financing. The second could be indebtedness, although France is very indebted today. I think the climate is a good reason to go into debt because it’s something that’s going to have an effect, and it’s going to produce an economic return fairly quickly. And then the third is to look for compulsory levies. And among these compulsory levies, why not, for the climate, ask the 10% most well-off to make an effort and basically tell them, why don’t you donate once and for all 5% of your assets for the climate? ? Through this channel, you would create a debt that you would have with regard to the tax authorities and there would be different methods for paying off this debt. For some, it may be annual withdrawals for a number of years. For others, it may be on the occasion of an assignment. It doesn’t have to be the same for everyone.