Wednesday, January 6, 2010

Carbon Tax Holdup in France Proves Recession Still Most Powerful Voice in Politics

In case anyone thought the French government was somehow more enlightened about climate change and environmental legislation than America, the news (FR) that the carbon tax originally proposed by Nicolas Sarkozy is about to be shelved should convince them otherwise.  The actual politics on this are a bit convoluted: Sarkozy had initially sought a 4.5 cent tax per liter on fossil fuels, and also would have raised domestic gas bills by 7 percent.  France's Constitutional Council, which must approve such measures, rejected it, ruling that the tax disproportionately affected middle class consumers and left France's biggest industrial polluters untouched.  So the bill was referred back to the National Assembly for revision. Now, under pressure from Sarkozy's own cabinet officials, the Assembly is suspending indefinitely the revision process that was supposed to have occurred.  As the report above indicates, these cabinet members cited the effect that a carbon tax would have on economic performance as the reason why it should be seriously reconsidered.  What this demonstrates is that the true culprit behind the failed Copenhagen talks is bad timing: environmental reforms are usually best discussed after a global recession.