Unilateral Carbon Tax Will Make French Industry Even Less Competitive

  • Date: 06/01/10

Large French companies that pollute heavily will be penalized under new carbon tax legislation but are likely to pay variable rates, French Economy Minister Christine Lagarde said in remarks published on Tuesday. More than 1,000 companies would be penalized according to how much energy they use to produce and how much competition their sectors face, Lagarde told French daily Les Echos.

The companies had been exempted from paying carbon tax in France under legislation that was annulled two days before it was due to come into force on January 1.

France’s constitutional council argued that the initial version of the carbon tax included too many exemptions that violated the principle of equality among taxpayers.

“We are working on the possibility of applying reduced rates and of putting in place other incentive mechanisms or platforms,” Lagarde told the paper.

“The competitiveness of companies is important and there is no question of taxing all these sectors indiscriminately including those that are economically fragile,” she said.

The government is racing to piece together new legislation for a carbon tax by January 20, when it is supposed to be presented to the cabinet.

In a separate interview on France 2 television, Lagarde said the new version would not include big changes given that the blueprint pointed in the right direction and would help to improve consumption patterns.

Companies in France that were already subjected to European Union emission quotas would not be taxed again in France, she said.

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