PARIS Dec 29 France's planned carbon tax cannot
be applied because it includes too many exemptions, a French
government body ensuring laws are constitutional ruled on
Tuesday, in an embarrassing setback for the government.
The tax on carbon-emitting products, meant to encourage
consumers to save energy and use less fossil fuels, is one of
President Nicolas Sarkozy's most loudly defended initiatives and
was meant to come into effect on Jan. 1, 2010.
"The exemptions included in the carbon tax run counter to
the aim of fighting climate change and create inequalities with
respect to public charges," the Constitutional Council said in a
Prime Minister Francois Fillon said in a separate statement
the cabinet would in January examine a new law taking into
account the ruling.
Sarkozy has thrown his weight behind the levy, saying it
would support the battle against climate change, but the plan
had to be watered down extensively to appease critics.
In its ruling, the council said the law exempted some of the
worst industrial polluters such as refineries and included
relief for farmers and fishermen, among numerous other
"93 percent of carbon dioxide emissions of industrial
origin, other than fuel, will be totally exempt from the carbon
tax," the government body said in the ruling.
The tax has caused public upheaval in France, with critics
within the ruling party saying the tax would hurt poor families
and people in rural areas with little public transport.
The opposition Greens broadly agreed with the principle but
said the tax should be higher, while the Socialists said it
would deal a further blow to consumers already struggling to
cope with the economic downturn.
As a result, the system that was eventually adopted would
have differentiated between urban and rural dwellers, and
applied to oil, gas and coal but not to electricity.
The levy, initially set at 17 euros ($25) per tonne of
carbon dioxide emissions, would have translated into a rise in
the price of fuel for cars, domestic heating and factories.
(Reporting by Gerard Bon and Sophie Hardach)