www.environmental-finance.com
10 September
The French government will next year introduce a carbon tax of €17 ($25) per tonne of carbon dioxide (CO2) emitted, President Nicolas Sarkozy announced today. Private households and industry will be taxed on emissions from heating and transport, but not for electricity consumption. The tax will mean an increase of €0.045 per litre of diesel and €0.04 per litre of petrol.
The figure is considerably lower that the €32/t recommended by former Socialist prime minister Michel Rocard in a June report and marginally higher than the €14/t French Prime Minister François Fillon suggested earlier this month. Sarkozy said Rocard's proposal made sense, but that €32/t was "too high in a time of [economic] crisis". However, he admitted that the tax will need to increase over time.
The electricity sector will be exempt from the tax because its production in France "emits very little CO2", thanks to the use of nuclear energy and renewables, said Sarkozy. The government will study ways of ensuring that the competitiveness of French industry is not compromised by the tax – Sarkozy cited fishing, agriculture and transport as the sectors most likely to be affected because of their significant use of fuel.
Private households will be compensated by tax reductions or a 'green cheque'. The tax is expected to raise around €4.3 billion a year. The sum will be placed in a fund and an independent commission will be set up to decide how the money should be spent.
Sarkozy had come under increasing pressure from consumer groups and prominent members of the opposition Socialist party to drop the idea of a carbon tax. Opponents claim the tax will put an extra burden on poorer households already struggling during the economic downturn. FNE, the French environmental organisation representing 3,000 associations, warned Sarkozy earlier this week that a minimum tax of €32/t CO2 is needed to make energy consumption decline.
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