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AB 2000 studies

Alain Boublil Blog

 

Ecology and the fuel crisis in France

The deep discontent provoked by past and coming increases of fuels taxation is a further sign of the political leaders incapacity to establish a right diagnostic about the situations they propose to correct, to elaborate the appropriated policies and to make them accepted by their citizens. The increase of the taxes levied on fuels and the convergence at the top between gasoline and diesel has, as an objective, to favor “energy transition”. But this policy, prompted by laudable intentions, is based on a confusion which has been at the origin of many errors.

Climate warming is generated by the accumulation in the atmosphere of greenhouse gas. It results from energy production and consumption by the planet inhabitants. This phenomenon is global. If a country makes efforts when the others are indifferent, its contribution will be a marginal one if its weight in the world economy is small and it will not receive any advantages. It is the lesson of the Paris Agreement. Everybody must get involved and especially the biggest CO2 emitters, the U.S., China since recently and tomorrow India whose oil consumption will increase from 4.5 million barrel per day today to 10 million between 2035 and 2040. Emerging nations pretend they are not responsible for the stock accumulated since the beginning of the industrial revolution and it would be unfair to make them supporting the whole effort. Developed countries, until Donald Trump decides to withdraw his country from that Agreement, recognized this right.

To the opposite, pollution is a local phenomenon which affects air quality we respire and which hurt immediately health of these who breathe it. The phenomenon is not new. If, in England the word “smog” appeared as the merger of “fog” and “smoke”, it was due to the coal power stations which were all around London. The two major factors of air pollution are the emissions provoked by coal combustion both in power plants and in domestic boilers, and by diesel engines. These ones, since their oil consumption by kilometer has been inferior to gasoline one during a long period of time are emitting less CO2 but much more thin particles which affect breathing capacities. It is the lack of recognition of that distinction between the global cause of climate warming and the local consequences of the pollution caused by coal and diesel which is at the origin of the mistakes occurred in France by our political leaders and of the crisis provoked by the announced tax increases on fuels.

At the eve of the great financial crisis, in July 2008, when the barrel price was at its top, a liter of SP95 gasoline cost 1.49€ and a diesel one 1.44€, so much more than today if we take into account inflation which has been near 10% during that period of time. During 2013 summer, a liter of gasoline was a little more expensive, 1.53€ but diesel had started to fall (1.33€). The reason for that divergence comes from the decisions taken in 2008 after the “Grenelle de l’Environnement”. To reduce CO2 emissions, it was decided to reduce taxes on diesel through the creation of the “ecologic bonus-malus”. Diesel price fall will go further in 2015 (1.20€) when oil prices start toheirfall. It reached its bottom in 2016 (1.15). During that period, gasoline prices fell only slightly, reaching their bottom level (1.33€) before sharply rebounding due to the impact of the rise of oil prices, to reach 1.53€ today, slightly more than ten years ago. The increase was more violent for diesel and has reached near 30 cents due to the government decision to align the taxes on the two fuels. It is the brutality of this increase which provokes today indignation and refusal.

The consequences of these political mistakes are heavy. The first one, which was unnoticed, has been the closure of 40% of France refinery capacities falling from 1.97 million barrel per day to 1.25 between 2007 and 2017. If the government priority is to support diesel, refineries dedicated to gasoline production have over-capacities and are not anymore profitable. It is economically impossible to import oil to refine it and after to re-export gasoline. So, several refineries were closed The second consequence has affected the car industry which had invested to produce this category of engines. It must quickly convert its plants today.

The political turnaround has had two causes. In front of the damaged generated in cities by particles rejections, it has been necessary to recognize that these ones were much more serious that the benefits delivered by a reduction, in fact marginal at the planet scale, of CO2 emissions. The “Dieselgate” in Germany has amplified the movement and it made people conscious about the harmfulness of that technology. But the answer in France has been too much brutal. The choice, quite justified, to stop that absurdity consisting in encouraging a kind of energy consumption which is so polluting occurred when oil prices were rebounding and when the measures adopted by the government were damaging purchasing power of a large majority of households. In 2018, at the end of September, receipts coming from the energy taxes had increased by 18% and brought to the state 1.4 billion euro more than last year during the same period.

The previous two years tax increases and the expected ones for the next years are weighting on household budget. They had been encouraged by the previous governments to choose this kind of vehicles. Their share in the total registrations had reached 70% in 2011. Since the beginning of this year, it has fallen under 40%. So their resale value is going to fall because these vehicles don’t represent the same interest than in the past. Incentives offered by the state to withdraw oldest and most polluting vehicles are useful but they only interest a small minority of households, compared to the millions of cars using diesel which have been registered during the last ten years. In that case, households will have lost on all counts. The error of these successive governments will have been to first incite, for environmental reasons, to buy this kind of vehicles and after to come back at a moment when oil prices were rebounding.

The futuristic message about energy transition, about the end of fossil energies and electric cars is not the good answer because it is not credible. Nobody can be sure that these vehicles will meet client interest. It is not the case today despite the costly financial incentives. Uncertainty reigns about their autonomy and on the equipment of terminals available and powerful enough. Atop of that, it is not possible, in the same time to support an increase of the power consumption for transportation, to reduce the share of the nuclear power production and to abandon fossil fuels. It would be better to target policies. The end of diesel engines is one of them, but it must be managed well enough to be accepted. It is not the case today.

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