Analysis · Environment · Climate Policy
Left-wing climate policy relies on bans, subsidies, and regulations. It penalises the poor, costs a fortune, and does little to cut emissions. There is a tool every economist agrees is superior — one that politicians avoid because it is transparent.
When you burn petrol or gas, you release CO₂ into the atmosphere. That CO₂ has a cost for society — floods, droughts, rising sea levels. But that cost doesn't appear on your bill. Economists call this a negative externality: a harm you impose on others without paying for it.
The liberal solution is direct: make people pay that cost. Not ban things. Not subsidise one technology over another. Put a price on the tonne of CO₂ — and let each actor find the cheapest way to cut emissions. That's the carbon market principle. The EU ETS, launched in 2005, covers power plants and heavy industry. The result in 18 years: −47% in emissions in covered sectors.
French climate policy rests on two pillars: subsidies (green bonus, MaPrimeRénov', feed-in tariffs) and bans (low-emission zones, penalties, future boiler standards). These two tools share one thing: they are not socially neutral. They benefit households that can afford to adapt, and penalise those who have no choice.
80% of green bonuses paid since 2020 went to the top 40% of households by income (ADEME, 2023). Low-emission zones have the opposite effect: low-income households own the oldest cars — exactly those that will be banned first. It's not a leisure activity being taken away. It's their tool for getting to work.
Sweden introduced its carbon tax in 1991 — ~€130 per tonne today. Since then, its emissions fell 33% while its GDP grew 75%. It emits 4.6t of CO₂ per capita — less than France. It has never banned a single combustion engine.
Germany made the opposite choice. €580 billion in subsidies over twenty years for renewables — the Energiewende. It closed its nuclear plants, kept its coal plants longer, and now emits 9.2t/capita — 53% more than France and twice as much as Sweden. The lesson: subsidising your preferred technology costs more and cuts fewer emissions than a simple carbon price.
There are three main ways to cut emissions. Bans and regulations (low-emission zones, bonus-malus, Euro 7) target specific behaviours — but miss everything they don't aim at. Subsidies direct investment — but towards technologies chosen by politicians, not the cheapest ones. The carbon price is the only tool blind to preferences: it lets each actor find their own solution.
The standard objection: "a carbon tax is unfair — it's the poor who pay." That's precisely why the carbon dividend exists. The tax is levied on all emissions — and its proceeds are redistributed in equal shares to all households. In Switzerland, this system is in place: two-thirds of households get back more than they pay. Lower-income households are the first to benefit. A low-emission zone redistributes nothing — it just bans.
You're told markets can't solve the climate crisis. That a carbon tax is unfair. That companies will cheat. Let's reverse those arguments — and look at what history actually shows.
The planet needs emissions cut — fast, efficiently, and fairly. The carbon market with dividend is the only tool that does all three. It doesn't pick technology winners. It doesn't penalise the poor. It lets millions of actors find their own path to net zero. Bans and subsidies are politically rewarding because they are visible — not because they work. Choosing symbolism over efficiency is also a moral failure: every tonne that could have been cut at lower cost wasn't.