French CO2 tax plan gets stakeholders' backing

Publication date: 13 July 2009

Business, trade union and NGO representatives in France have agreed in principle a government plan to introduce a carbon tax on fossil fuel use to reduce greenhouse gas emissions in sectors such as transport and housing.

Former French prime minister Michel Rocard, who is chairing an expert group asked to advise the government on how to implement the tax, will submit recommendations on 24 July. "There is a consensus [on the idea]" but making sure the tax is fair and efficient will not be an easy task, he said following a stakeholder meeting on Thursday.

There is debate within the government over how the revenues from the tax, which could amount to up to €8bn annually, should be used. Environment minister Jean-Louis Borloo wants to use the cash to encourage greener behaviours among households, and possibly companies. But the budget ministry is opposed to the idea.

Mr Rocard gave cautious support to Mr Borloo's proposal. The idea has already been applied to the automobile sector through the government's "bonus-malus" tax and subsidy scheme. But the scheme is proving costly because of its greater-than-expected success among the public. It is expected to cost the government €400m this year.

Source: ENDS