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Green energy

September 10, 2009

France plans to impose a new tax on carbon and fossil fuels next year that will make it more expensive for its citizens to drive their cars and heat their homes.

Nicholas Sarkozy
Sarkozy wants the French to adopt a "greener" way of lifeImage: AP

French President Nicolas Sarkozy said Thursday that French households and businesses would have to pay 17 euros ($24.75) per ton of carbon that they release into the atmosphere starting in 2010.

According to Sarkozy, that will translate into an increase of 4 cents per liter of gasoline and 0.4 cents per kilowatt hour of natural gas used.

To help alleviate the burden of paying the new taxes, Sarkozy said the French government would offer its citizens a one-time income tax reduction. In total, French households will be given about 3 billion euros next year in carbon tax compensation.

"The aim of the carbon tax is not to fill the coffers of the state," Sarkozy said.

To make the new tax burden easier for businesses to bear, the French government would get rid of local business taxes that are currently imposed by regional and departmental councils.

Electricity would not be taxed, Sarkozy said, because it produces little carbon dioxide due to its high reliance on nuclear power.

Broad opposition

Polls in France have shown that the majority of the country's citizens are opposed to the tax because they believe it will only add to their burden but not necessarily improve the environment.

Many are concerned about how people in France's poorest households will able to afford the levy.

Segolene Royal of France's Socialist Party, a former presidential candidate, has called the tax "unjust" and "impracticable."

The opposition Green party says the tax is too low to have a significant impact.

Intensive users of fuel such as farmers and fisherman have also been highly critical of the idea.

If Sarkozy's plan does become law, France will be the largest country to have a tariff on carbon emissions. Sweden, Denmark, Finland, Norway and Switzerland already impose such taxes.

A potentially more popular move

In a move that will likely be more popular, Sarkozy also said that France will unveil a new "clean cars" program this month and offer a 5,000 euro bonus to buyers who pick environmentally friendly models.

an electric car made by Nissan
French citizens who buy electric cars, like this Nissan, will get rebate checksImage: AP

He said the car program would allow automakers to offer French consumers "the possibility of buying electric or hybrid vehicles at acceptable prices and to benefit from the super bonus."

Environment Minister Jean-Louis Borloo is set to release details of the 16-month rebate program on Sept. 23.

In total, the French government will offer 400 million euros over four years to boost the development of the green car market.


Editor: Nancy Isenson