It did seem that France would buck the trend by opting for a national carbon tax, an idea strongly supported by French President Nicolas Sarkozy. But the law was judged unconstitutional just two days before it was due to come into force on January 1st 2010.
France’s Constitutional Council found that the law was unfair because it would have penalised households, particularly those dependent on cars, but did not include many industrial polluters – 93% of emissions from industry would not have been taxed. However, many of these high-emissions businesses are already included in the EU cap-and-trade Emissions Trading Scheme (EU ETS).
The proposal was for a tax of €17 per tonne on oil, coal and gas consumption, although green groups wanted it to be higher.
The tax was expected to raise €1.5bn in 20101 for the French state coffers, which may be one reason why the French government has said that it would put a revised version of the legislation before parliament next month.
The bill will be reformed, particularly as it applies to industrial sectors. The implication is that some of the business exemptions will be removed, but the expectation is that a lower tax will be applied to businesses to ensure their continued competitiveness.
It’s a good example of the shifting sands of national legislation (and why Copenhagen was so important). I guess the tax was aimed at households in order to ensure that businesses remained competitive internationally. That’s the issue that only a strong global agreement can resolve.
I may be biased, but it does seem to me that something more like the UK’s Carbon Reduction Commitment, aimed at businesses with a specific level of emissions, would be more effective in the long run.
If the new version of the French solution does end up being more aimed at business then it’s likely to give a boost to the green ICT sector. Companies will be looking to greater business efficiencies, carbon counting solutions and more energy efficient hardware to reduce their liability under the law, although much will depend on the tax level.