Sarkozy unveils new French carbon tax

In Europe, Governments & Politics, News Headlines

French President Nicolas Sarkozy on Thursday unveiled a new carbon tax to help combat global warming, calling it a “fiscal revolution” and overriding strong public opposition to the plan.

The new levy on oil, gas and coal consumption by households and businesses will come into effect next year, making France the biggest economy yet to impose a straight-up carbon tax.

“It is time to create green taxation,” Sarkozy said in an address delivered during a visit to a heat pump factory in Culoz, near the French border with Switzerland.

“This is a major fiscal shift, an important innovation,” he said. “It is the first step of a fiscal revolution that will be developed.”

The French president is seeking to boost his green credentials ahead of a key UN conference on climate change in Copenhagen in December that could mark a turning point in the fight against global warming.

Sarkozy set the new carbon tax at 17 euros (25 dollars) per tonne of carbon dioxide (CO2) emitted, higher than a figure floated last week by Prime Minister Francois Fillon.

France has been engulfed for weeks in a fierce debate over the carbon tax, with both the government’s right-wing supporters and opponents on the left balking at the scheme.

Polls show about two-thirds of voters are against the tax and critics in Sarkozy’s camp fear the new levy will trigger a backlash at a time when families find themselves strapped for cash.

France’s Socialist opposition has warned against penalising low-income families with a flat levy on fuel, especially those in out-of-town areas who have no choice but to use cars.

In practice, the 17-euro tax will push up the average household heating bill and raise the cost of a litre of unleaded fuel by about four cents, or about 25 US cents per gallon.

Revenues from the new tax will however be put back into taxpayers’ pockets through other tax cuts and “green cheques”. An independent commission will be set up to oversee the redistribution of the new tax revenues.

The carbon tax will not apply to electricity which is produced mostly from France’s large network of nuclear reactors, which are not a major source of greenhouse gas emissions.

Struggling businesses in agriculture, fisheries and transport may be spared from the new tax, Sarkozy said.

He also announced plans to unveil a new “clean cars” programme on September 23 that will offer a 5,000-euro bonus to consumers who opt for environmentally-friendly models.

Praising Europe’s commitment to cut CO2 emissions by 20 percent in 2020, Sarkozy also urged other governments to follow suit and join the fight against global warming.

“Asia, the United States and major developing countries must make the same effort as Europe. There is no other choice. There is only one planet, a single world and we have a shared responsibility,” he said.

Finland was the first European country to impose a carbon tax, in 1990, followed a year later by Sweden and later Denmark.

France has set a target of slashing its CO2 emissions by 75 percent by 2050 and support for environmentally-friendly measures generally runs strong among the French.

But a TNS Sofres survey released Thursday showed two-thirds of voters were against the tax and 73 percent believed it would not prompt consumers to reduce use of polluting energies.

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