Opinion — Raising fuel costs as a way to solve environmental problems

Price is the one environmental message that every driver reads, which is why taxing fuel appeals to so many governments. Even so, I only partly agree that making petrol and diesel dearer is among the best answers to environmental problems, because the policy works well only under conditions that are often missing.

Higher fuel prices undoubtedly change behaviour. When filling the tank costs more, people combine journeys, share cars or leave the car at home for short trips, and over time they choose smaller or electric models, all of which cut exhaust emissions. Much of Western Europe has taxed fuel heavily for decades, and its drivers have long favoured compact, fuel-efficient cars and relied on dense rail networks. A fuel tax has the further merit of being simple to collect and of making polluters bear the true cost of the damage they cause. The revenue, moreover, can pay for buses, trams and cycle lanes.

The measure has two serious limits, however. First, it only reduces driving where an alternative exists. A commuter in a city with a metro can switch, but a farmer or a shift worker in a rural area cannot, so for them the tax is a penalty with no escape, and it falls hardest on those with the lowest incomes. France learned this in 2018, when a planned rise in fuel duty provoked the 'yellow vest' protests and was abandoned within weeks. Second, since goods travel by lorry, costlier fuel pushes up prices across the economy. More fundamentally, vehicles are only one source of pollution: more expensive petrol does nothing about coal-fired power stations, deforestation or plastic waste.

In conclusion, raising fuel costs is a useful instrument, not a solution in itself. It deserves a place among the best measures only when governments provide reliable public transport, return part of the revenue to poorer households and tackle emissions from industry and electricity generation with equal determination.