Thursday, April 1, 2010

French President Sarkozy Drops Plan for French Carbon Tax; Seeks Similar Tax at European Union Level

French President Nicholas Sarkozy has abandoned plans for a French national carbon tax. The decision, announced last week, came in the wake of regional French elections in which President Sarkozy's party suffered enormous electoral losses.

Now, however, President Sarkozy wants the European Union -- as opposed to several individual countries -- to impose a carbon tax to protect EU firms' competitiveness in a world market where almost no other countries have taken firm stands to reduce carbon emissions.

According to Jean-Francios Cope, a spokesman for the president's party, "The [carbon] tax will be European or it won't be at all," the BNA International Environment Daily reported ("French Government Abandons its Attempt at National Carbon Tax, Will Focus on EU Tax," March 24, 2010).

There is no doubt that European firms are concerned about the competitive disadvantage that the EU Emissions Trading Scheme puts on economic sectors operating on the continent. But enacting an EU-wide carbon tax is easier said than done. First, it would need to be proposed by the European Commission, which is the only EU institution that can propose legislation. Second, it would need unanimous approval from the 27 member state governments, a task that is hardly easy even in the best of times.

Does the pronouncement by President Sarkozy make headlines? Yes. Is it very practical? No. On the other hand, it is reassuring to know that politics is much the same everywhere. High aspirational goals made by some local political actors seeking approval in their own constituency often come to nothing on a larger stage in the end. This is likely to be the case in this instance.

--Don Smith

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