French Carbon Tax: Questions Surround Green Cheque

by Ulrika Lomas, Tax-News.com, Brussels

09 July 2009

Emphasising that the possible introduction of a new carbon tax in France is not intended as a punitive measure, French Minister for Ecology Jean-Louis Borloo has announced that any revenue derived from the green tax would be paid back in full to both households and businesses, evoking the idea of a “chèque vert” or green cheque as a means to do so.

Proposed by the Nicolas Hulot Foundation, which aims to develop environmental awareness, and endorsed by the Ecology Minister, the green cheque, issued to individual households, would amount to around EUR130. A means of providing compensation for businesses is still under scrutiny, however, the Minister acknowledged.

Fiercely criticising Borloo for his premature remarks, former French Prime Minister Michel Rocard, presiding over the group of experts currently evaluating the introduction of the new carbon tax, has stressed that the green cheque is just one of several avenues being explored by the commission.

Demanded by environmentalists as a means of combating global warming, and championed by French President Nicolas Sarkozy, a carbon tax or “contribution climat-énergie” (CCE), would tax all sources of carbon dioxide emissions, including the use of fossil fuels, such as petrol, gas, and coal.

Targeting priority sectors such as transport, housing and agriculture, the tax is designed to reduce consumption of fossil fuels, and to encourage consumers to opt for more energy-efficient and environmentally friendly products.

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