France Proposes Environmental Import Taxes

by Ulrika Lomas, Tax-News.com, Brussels

15 November 2006

French Prime Minister Dominique de Villepin has proposed a 'carbon levy' on goods imported into the European Union, to be used to compensate businesses which are facing tougher environmental measures in the EU.

In a speech delivered to a sustainable-development meeting in Nairobi, where a two-week climate change conference attended by 189 countries is taking place, Villepin argued that non-signatories to the Kyoto protocol must be made to pay some sort of price for the carbon they release.

“We have decided to reinforce the principle that the polluter pays. Europe has to use all its weight to stand up to this sort of environmental dumping,” he said.

“I would like us to study now with our European partners the principle of a carbon tax on the import of industrial products from countries that refuse to commit themselves to the Kyoto Protocol after 2012,” he added.

Countries which have signed the Kyoto pact have agreed to emission-cutting targets, but the process is fatally flawed, as some of the world's biggest polluters, such as the United States and China, have refused to take part.

China, one of the world's fastest-growing economies, produces more than 4.7 billion tonnes of CO2 each year and this output is rising.

However, critics of the French plan have dismissed the proposals as nothing more than protectionism in disguise.

Villepin stated that France would present concrete proposals to the European Union about how such a tax might work in the first half of 2007. The French proposal would need the unanimous backing of all EU member states to become effective.

Villepin has placed green issues high on the agenda in the run-up to next year's French elections. He has proposed a tax on coal usage and higher taxes on industrial pollution and aircraft noise pollution.

He has also suggested higher taxes or tolls for road freight in “sensitive zones” like the Alpine regions, and road charging in large towns and cities. Tax breaks would be offered to families who made their houses more energy efficient.

Recommended