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Article France: Carbon Tax Plan

(Sept. 21, 2009) On September 10, 2009, French President Nicolas Sarkozy announced his government's controversial plan to impose a new “carbon tax” (taxe carbone), to take effect on January 1, 2010, on emissions from fossil fuels such as coal, heating oil, gasoline, and natural gas. The tax, called a climate-energy contribution, is to be stipulated in France's Finance Bill 2010. (David Gauthier-Villars, France to Unveil Carbon Tax in Jan. 2010, EMII.COM, Sept. 15, 2009, available at
; World News: France Moves to Levy Carbon Tax on Fossil Fuels—Environmentalists Worry Rate Is Too Low to Have Much Impact, THE WALL STREET JOURNAL, Sept. 11, 2009, at A10, available at ABI/INFORM Global No. 1856935771 (subscription database); Nicolas Jacquot, France Hopes to Introduce Carbon Tax Soon, INTERNATIONAL TAX REVIEW (Sept. 2009), available at

The tax will be €17 (about US$25) per metric ton of carbon dioxide (CO2) emitted, a higher rate than the €14 figure cited the week before by French Prime Minister Francois Fillon, but lower than the €32 levy originally suggested in a report on climate change presented to Sarkozy in July by a special committee on climate-energy contribution. The tax is to be paid by all fossil-fuel users, at the same rate for both households and businesses, and will apply to 70 percent of the country's carbon emissions. It will mean an increase of 4.5 euro cents (about US$0.07) per liter of fuel oil and 4 euro cents per liter of petrol, and is expected to generate an annual €4.3 billion (about US$6.3 billion) in revenue. The tax would not be applied to electricity, which in France is generated chiefly by nuclear power. (Sarkozy Announces Carbon Tax to Tackle Global Warming, FRANCE 24, Sept. 10, 2009, available at
; France Set to Impose Carbon Tax, BBC NEWS, Sept. 10, 2009, available at

Sarkozy stated that tax cuts and “green checks” for taxpayers would make up for the revenues taken from them by the new levy. He added that an independent commission would be established to ensure “complete transparency” in regard to the carbon tax rebates. (FRANCE 24, supra.) While Sarkozy contends the purpose of the tax is to encourage a change the French to reduce energy consumption, critics have called it a mere “ploy to boost ailing state finances.” Reportedly, two-thirds of French voters have expressed opposition to the tax. (BBC NEWS, supra.)

Once adopted into law, the plan would reportedly make France the largest economy in Europe to impose such a levy on households and businesses. (FRANCE 24, supra.) The first European country to impose a carbon tax was Finland, in 1990; Sweden and Norway followed in 1991, then Denmark. Austria, Germany, Italy, the Netherlands, Slovenia, and the United Kingdom also have a carbon tax. New Zealand was the first country world-wide to establish the tax. The Canadian provinces of Quebec and British Columbia have instituted the levy as well. Ireland and China are among the nations now considering implementing one. (Laurence Caramel, CO2 : 17 euros la tonne, 4 % d'émissions en moins, LE MONDE, Sept. 10, 2009, available at
; THE REALITY OF CARBON TAXES IN THE 21st CENTURY (Jan. 2009), available at; Kilian Doyle, Irish Government Moves to Impose Carbon Tax, IRISH TIMES, available at; A BC Carbon Tax, SIERRA CLUB BC,
(last visited Sept. 17, 2009).)

On July 23, 2009, the French Parliament adopted an environmental law known as Grenelle 1 (Law No. 2009-967 of August 3, 2009, on Programming for the Implementation of the Grenelle on the Environment), which establishes the framework of French environmental policy in such areas as transport, energy, habitats, prevention of environmental and health risks, and so on. (LOI n° 2009-967 du 3 août 2009 de programmation relative à la mise en oeuvre du Grenelle de l'environnement (1), LEGIFRANCE, Aug. 6, 2009 [consolidated version], available at|d0791; La première loi du Grenelle [in French], LE GRENELLE ENVIRONNEMENT (Sept. 2009), available at

Grenelle 1, which was promulgated on August 3, is one of the outcomes of “Grenelle Environnement,” or Environment Round Table, a forum launched in July 2007 that brings together all stakeholders, e.g., representatives of the French government, local authorities, business, trade unions, and non-government organizations, to formulate plans of action and measures on environmental issues. (Presentation [on the Environment Round Table] [in English], Le Grenelle Environnement website, (last visited Sept. 17, 2009).) Grenelle 2, a bill on the national commitment to the environment (Projet de loi portant engagement national pour l'environnement), in more than 120 articles, is now before the French Senate. (Le projet de loi dit “Grenelle 2” passe au Sénat, French Ministry of Ecology, Energy, Sustainable Development, and the Sea website,Sept. 15, 2009, available at; La loi “Grenelle 2” sur l'environnement entame son marathon legislative, LE MONDE, Sept. 15, 2009, available at

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