French Carbon Tax Rejected by Constitutional Court

A carbon tax that would have taken effect Jan. 1, 2010, in France has been struck down by the French Constitutional Court. Had it come into law, the tax would have made France the largest economy in the world subject to a carbon levy.

A multitude of exemptions that were written into the law created a "breach of the principle of tax equality," the court ruled.

Among the sectors that were exempted by the law were cement plants, power producers, and oil and gas refineries, The Wall Street Journal reported ("French Court Rejects Carbon-Emissions Tax, Dealing Blow to Sarkozy," Dec. 31, 2009). The law would have provided for a $25 per ton levy on carbon emissions. Interesting enough, the tax was challenged by the left of center Socialist Party. President Nicholas Sarkozy's right of center party proposed and passed the legislation.

Despite the decision, Mr. Sarkozy's party is expected to write a revised version of the legislation in January. Prime Minister Francois Fillon said a carbon tax continues to be a "priority for the president of the republic and the government," the Financial Times reported ("Sarkozy Fights to Save Flagship Carbon Tax," Dec. 31, 2009).

In fighting his election campaign in 2007, Mr. Sarkozy pledged that reducing carbon emissions would be a top priority of his government.