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Fuel tax marks start of political calendar

Video by Nicholas RUSHWORTH

Text by Joseph BAMAT

Latest update : 2009-09-10

A flat tax on fuel consumption is at the centre of France’s first political debate after the government’s return from summer recess. Prime Minister François Fillon is defending the fiscal measure, which promises to be a divisive issue.

A tax on fuel consumption is at the centre of France’s first political debate after the government’s return from summer recess. Although all French parties say they support fiscal measures to curb carbon dioxide emissions and lower consumption of non-renewable energy sources, the issue is a divisive one, even within parties.

Prime Minister François Fillon has defended the tax in an interview to the weekly Figaro Magazine, to be published on Saturday. Echoing President Nicolas Sarkozy’s wish to implement an overarching levy to reduce France’s total fuel consumption, Fillon hoped to defuse opposition to the tax among industrial groups and members of his own UMP centre-right party.

"We have decided to apply this tax progressively, starting with the market price of carbon, or 14 euros" per tonne, Fillon told Le Figaro. He also reassured constituents that the tax would not go into effect until 2010.

Carbon dioxide’s market price rose in September to 15 euros per tonne just days after Fillon’s interview.

Based on France's commitment to slash global warming emissions by 75 percent by 2050, a government panel originally called for a levy of 32 euros per tonne of carbon dioxide emitted.

But even the watered-down version of the tax faces staunch in-camp critics. Jean-François Copé, the UMP’s majority leader in the National Assembly, said he would not blindly support the president on the issue.

“It boils down to taking four to five billion euros from the taxpayers’ pockets. It’s just not possible!” Copé told news agency AFP.

Outcome of France’s environment forum

Sarkozy first introduced the levy to the French public in October 2007, at the end of vast national forum on the climate change and the environment.

In practice, a 14-euro carbon tax would add 0.033 euros to the cost of one litre of unleaded fuel, based on previous government estimates. Household heating costs would rise by between 25 and 75 euros per year, depending on the type of building and method used.

But the prime minister insists that all revenue from the tax would be handed back to taxpayers, in the form of "green cheques" or tax cuts elsewhere.

"I assure you there will be no increase in obligatory taxes. The carbon tax is about transferring taxation; it is not a new tax," Fillon said.

A potentially divisive issue on the left

The carbon tax is also a subject of potential disagreement among the government’s opposition. The deeply fractured Socialist camp went to great lengths to show a united front at their annual summer meeting in August, and to court the Green Party, with whom they now find themselves at odds over the proposed fuel tax.

France's Socialists have warned against penalising low-income families with a flat levy on fuel, saying the measure was inefficient, unjust and absolves the highest-polluting industrial groups.

The Greens are now the only party that has strongly come out in favour of President Sarkozy’s fuel tax, raising questions about the strength of its emerging partnership with the Socialist Party.

While the carbon tax is not a priority issue for most of the French electorate, the issue is serving as a stage for a return to familiar political performances. Seizing the opportunity, the defeated Socialist presidential candidate Segolene Royal has made strong statements against the fuel levy, not unlike those made by her party, but pronounced in parallel at an event with all the trappings of a campaign kick-off.

Date created : 2009-09-03