Sarkozy Vows to Instate Carbon Tax

January 7, 2010 Taxation in France

Nicolas SarkozyFrench President Nicolas Sarkozy has vowed to amend and instate a new carbon tax in France, after his original attempt was deemed to be unlawful.

Speaking at the first cabinet meeting of 2010, on January 5th, Nicolas Sarkozy informed ministers that he intends to see a new carbon tax law implemented in the country and come into effect on July 1st. The tax is expected to raise €3.5 billion annually, which will be used to aid households in reducing energy consumption. If successful, the carbon tax laws will see France as the largest economy so far to implement a carbon levy.

The carbon tax laws were initially planned to come into effect on January 1st, but were deemed unlawful by the French Constitutional Council on December 29th, 2009. The council objected to the many exceptions that were written into the law, including the exclusion of nearly 1,000 organizations that are already covered under the European Union’s emissions trading scheme. Further, the council claimed that nearly 93 percent of France’s industrial emissions would have been free from taxation if the law was enacted.

The original carbon tax proposal was met with opposition from its inception. The French Green Party objected to it on the grounds that the levy should be higher, while the Left Party claimed that it would ultimately hurt consumers.

Chantal Joanno, French Junior Minister for Ecology, has stated that a revised law would be brought in front of Parliament in February.

Photo by Downing Street