Sarkozy launches green tax plan

FRANCE: French President Nicolas Sarkozy launched plans on Thursday for a carbon tax to encourage industry and households to cut energy consumption.

The levy, initially set at 17 euros ($24.8) per tonne of carbon dioxide emissions, will translate into a rise in the price of fuel for cars, domestic heating and factories.

“The gravest challenge that we face is climate change ... Every one of our compatriots must feel concerned,” Sarkozy said in a televised speech aimed at winning over a sceptical public.

In the works for months, the tax has caused a political furore in France, with disagreements within the ruling party and conflicting objections from opposition Greens and Socialists.

The Greens broadly agree with the principle but say the levy should be higher in order to have a meaningful impact, while the Socialists say it will hurt families already struggling to weather the worst economic downturn in over 15 years.

An opinion poll by Ifop for this week’s Paris Match magazine found that 65 percent of people were against the tax.

The tax would be levied from Jan. 1, 2010, Prime Minister Francois Fillon told TF1 television late on Thursday.

Critics accuse the government of seeking ways to increase its revenues in a year when fiscal income has plunged because of the recession, causing the budget deficit to balloon.

Sarkozy rejected that criticism, pledging that the carbon levy would not increase the burden on households because the rise in fuel bills would be offset by cuts in income tax.

Those households too poor to pay income tax would receive “green cheques” from the state to compensate them for higher energy bills, he said. The tax cuts and green cheques will take into account the number of people in each household. PARIS, Friday, Reuters