France lines up carbon tax[fr] 

French Environment and Finance Ministers Jean-Louis Borloo and Christine Lagarde opened the debate on the tax by presenting a white paper for public consultation on 10 June. 

However, the government did not give details of what products the future tax should cover, nor did it specify how it should be implemented. Instead, it asked a panel of experts to work out the nitty-gritty at a meeting on 2-3 July. 

The purpose of the tax is to nudge both businesses and consumers towards greener energy consumption to help France meet its targets for cutting greenhouse gas emissions. The government insists that the tax would not add to the financial burden on industry and households, because it would be accompanied by other tax reductions.

The new tax was initially intended to come into being in 2010. But former Prime Minister Michel Rocard, whom President Nicolas Sarkozy put in the charge of the dossier, said it would not become a reality before 2011 at the earliest. He said he would not commit to any deadlines and described rushing into things as a "recipe for failure", EurActiv.fr reported. 

Sweden to drive EU-wide tax

Sweden has made clear that it aims to push for a Europe-wide tax on CO2 during its presidency, which starts in July (EurActiv 12/05/09). The Swedish government considers its own tax scheme on fuel and diesel to have been a success, and hopes to relay this to its European partners.

"We now need to initiate discussions on how economic instruments can best be utilised in climate policy. I believe tools such as a carbon tax and emissions trading, if designed well, can play a key role in addressing climate problems," Swedish Prime Minister Fredrik Reinfeldt said in Brussels on 9 June, outlining his country's priorities for the EU presidency.

Europe's emissions trading scheme, the EU's flagship climate instrument, already sets a price on carbon for industrial emissions. But Sweden argues that this still leaves 60% of emissions untouched, and is advocating a tax as the best way to bring them down. 

The French government is arguing along similar lines, claiming that emissions trading is not a suitable instrument for reducing emissions from all sources as it can cover only 38% of the country's CO2 emissions.

Green wave after elections

The idea of a carbon tax was first floated in France by a stakeholder platform, which recommended various emissions-cutting measures in 2007. At the time, Sarkozy promised to consider such a move as a means of shifting France's high tax burden away from labour to the environment (EurActiv 26/10/07).

The green drive now seems to be back on, as the green coalition Europe Ecologie surpassed all expectations in the European elections last week (7 June) by winning over 16% of the French vote (EurActiv 10/06/09). Although previously a no-go area for many countries, which want to keep their fiscal independence, a tax on carbon now seems to be gaining favour.