The Global Climate Ledger

The Global Climate Ledger

The rise of the global middle class threatens to blow up the environmental envelope. Can the link between income and emissions be broken?

A gilet jaune protester in Toulouse (Alain Pitton/NurPhoto via Getty Images)

Unsustainable Inequalities: Social Justice and the Environment
by Lucas Chancel
Harvard University Press, 2020, 184 pp.

The gilets jaunes protests haunt global climate politics. The weeks of demonstrations and clashes with police that began in France in November 2018 were triggered by the announcement of steep increases in gas prices, at a time when President Emmanuel Macron’s government was slashing taxes on wealth. It was an egregious political misstep, which has put the question of “just transition” at the top of the climate agenda. If a rapid energy transition is to be possible in affluent but highly unequal democracies, the gilets jaunes protesters served notice that distributional questions could not be ignored.

The protests were all the more striking because environmental equity had been a hot topic in France from the moment that carbon taxes were first introduced under former President François Hollande in 2014. The Paris climate conference of 2015, remembered fondly in the United States as the high point for Obama-era climate action, was also the signal diplomatic achievement of the Hollande presidency. At the time, Macron was serving as economic minister in the Socialist cabinet. Distributional issues were front and center.

The basic shift agreed to in Paris was the abandonment of the firewall that limited demands for emissions reductions to industrialized countries, listed in Annex I of the UN Treaty signed at Rio in 1992. The willingness of emerging market countries like China and India to enter into carbon reduction talks made it all the more important for the rich countries to offer offsets in the form of funding. The main issue at Paris was climate mitigation—reducing the emissions of greenhouse gases. But, given the global warming that was already underway, precautionary investment in climate change adaptation was urgent. In 2015 the investment needed to protect vulnerable countries around the world was estimated at roughly €125 billion per annum by 2025 ($150 billion at then prevailing exchange rates). Actual spending was closer to €10 billion, of which Europe contributed 62 percent. Clearly, there needed to be a huge increase in spending. But who would pay?

In 2018 the advocates of the U.S. Green New Deal, inspired by the economic analysis of Modern Monetary Theory, would waive this question aside. Within the limits set by the risk of inflation, one should simply raise the funds needed by central bank credit. The question of debt issuance or taxation could be settled as and when required. But that is not how European argument in 2015 was wired. Green investments and distribution were directly coupled to the question of taxation and redistribution.

The blunt argument is that industrialized states are responsible and that they should pay. Since the start of global ...