France Introduces Carbon Tax Months After Fracking Ban

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Originally published on ThinkProgress.
By Emily Atkin.

The French Parliament on Thursday adopted a budget for 2014 which includes a tax on carbon emissions from gas, heating oil and coal, according to a report in Platts.

The money derived from the tax — which largely targets transport fuels and domestic heating — will be used to reduce emissions through increased installation of renewable energy throughout the country, according to the report. The move is projected to raise €4 billion, or $5.5 billion, per year by 2016, which can then spent on tax breaks for the wind and solar power industries.

“Its operation is simple: part of domestic consumption taxes on fuels and fossil fuels will be based on CO2 emissions given off by their use,” Prime Minister Jean-Marc Ayrualt said when introducing the proposed tax in September, noting the tax will affect the petrol, diesel, coal, natural gas, and heavy fuel oil industries. “Throughout this transition, the Government will pay attention to the situation of the French, especially the poorest, who often worry about these changes.”

According to Platts, carbon will be taxed at a rate of 7 euros per tonne emitted in 2014, and will rise to 14.5 euros per tonne in 2015. The rate will again rise in 2016 to 22 euros per tonne emitted. President Francois Hallonde also pledged in September to reduce the country’s use of fossil fuels by 30 percent by 2030, and by 50 percent by 2050.

Companies who are currently participating in France’s Emissions Trading Scheme, an EU initiative to reduce emissions of carbon dioxide and other greenhouse gases, will be exempt from the tax, along with the fishing and transportation sectors.

The move is a win for environmentalists and those concerned about climate change, as a carbon tax has been shown to be essential to preserve a livable climate. According to a November study from the Organisation for Economic Cooperation and Development, a carbon tax is one of the most cost-effective ways to reduce emissions. Indeed, if the U.S. were to impose a carbon tax of $25 per ton of emissions, it would cut the deficit by $1 trillion over a decade, according to the Congressional Budget Office.

France’s adoption of a carbon tax is not the first environmentally friendly policy change the country has made recently. In October, France completed its ban on fracking, after a constitutional court upheld a 2011 law prohibiting the practice and canceling all exploration permits. The decision posted on the court’s website said the ban “conforms to the constitution” and is not “disproportionate,” effectively protecting it from any future legal challenge.

At the time, French Environment Minister Philippe Martin called it “a judicial victory but also an environmental and political victory … With this decision the ban on hydraulic fracturing is absolute.”

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9 thoughts on “France Introduces Carbon Tax Months After Fracking Ban

  • Great news. I don’t like over emphasizing the deficit benefits, though. It’s important that fossil pollution fee be revenue-neutral, because I don’t want government dependent on my consumption of fossil fuels for its revenue. I want all fossil energy consumption to go to zero, and I want the government to have the same aim with no reasons to disagree. Earmarking the pollution fee to pay for new energy subsidies as France is doing is much better. But the best way is to simply give it back to everyone equally every month, or create an extended tax holiday specially designed to be as broad and equal as possible. That way, no one can say that government is picking winners. Consumers are the free market, and energy projects and technology will compete on merit alone. Even non-energy products, other valuable non-energy economic activity, A.K.A. efficiency, will benefit. It’s the only way to bake in incentives for efficiency and any new unforeseen technology. Penalize pollution, reward everything.

    • Yes. This. Spread this.

      Carbon tax with EQUAL return to all parties. Make it as simple as possible to prevent loopholes.

      • Citizens Climate Lobby, and pretty much every conservative who is brave enough to talk about fossil emissions as pollution are in favor of this.

  • From a global perspective this is a small but important step forward. There will never be a big bang ultimate all encompassing global climate deal. The battle will be won by a thousand small steps like these.

    I have my thoughts about the feeble long term goals: 30% by 2030 and 50% by 2050? I’ll just think they made it up because it is easy to remember (30 – 30 / 50 – 50) but in reality the world will have to do much better. Globally we will have to reduce by 80% in 2050, and to compensate for developing countries that will increase their energy use, developed countries will have to do better than 80% in 2050.

    But I’m not afraid of the 80% by 2050. Renewable energies are maturing fast and getting cheaper even faster. Fossil fuels already have a hard time competing in some instances. As long as countries are stepping up these supportive policies, fossil fuels will be relegated to niches (like aviation/shipping) before we know it.

    • I agree. Most changes start slow and accelerate.

      By 2050 most coal plants and essentially all automobiles will have worn out and been replaced.
      Those replacements are becoming more and more carbon free.

    • Also great points! 😀 The 30 by 30 & 50 by 50 thing is funny.

  • France… one of the best countries in Europe when it comes to clean energy. If only Germany and Poland could have done the same… There is still a long way to go with the big coal countries.

    • Well, France does have a low carbon footprint.

      But those reactors will wear out and need to be replaced. France can’t replace them for anything as cheap as renewables. France will go through the process of moving from nuclear to renewables because that’s the wise financial decision.

      France has already started the transition.

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