France's Rocard Favours EU Carbon Tax

by Ulrika Lomas, Tax-News.com, Brussels

08 January 2010

Following the recent decision by the French Constitutional Court to censure the much championed carbon tax plans of the government, chairman of the carbon tax panel, Michel Rocard, has put forward the idea of abolishing the existing European carbon dioxide quota system and replacing it with a new European carbon tax.

According to the former French Prime Minister, the replacement of the quota system with a general carbon levy within Europe would address any concerns regarding tax equity, while also providing certainty to market players.

It would also serve to resolve the problem, raised by the country’s Constitutional Court, of imposing a carbon tax on heavy industry in France alongside the existing quota system, he maintained.

The Court had also deemed the principle of the quota system to be null and void, he revealed.

Although the Swedish presidency of the EU Council, which expired at the end of 2009, advocated the introduction of an EU-wide carbon tax, it remains to be seen as to whether or not the new EU President, Belgian Prime Minister Herman van Rompuy, and the incoming Spanish presidency will take up the carbon tax gauntlet.

Fearing that the government’s carbon tax plans might be invalidated for a second time, Michel Rocard has also urged the government to delay examination of the revised legal text in parliament until after the country’s regional elections in March.

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