France’s Carbon Tax Hitch; Brazil’s Emissions Law Goes Ahead

France’s Carbon Tax Hitch; Brazil’s Emissions Law Goes Ahead

French ministers scrambled before year end to rescue a carbon tax aimed at cutting energy consumption, which was annulled by the Constitutional Court as there were too many loopholes benefiting major industrial polluters, while Brazilian President Luiz Inacio Lula da Silva on signed into law a national policy to reduce emissions by between 36.1% and 38.9% by 2020.

Crispian Balmer for Reuters World Environment News (31 December 2009):

PARIS – French ministers scrambled on Wednesday to rescue a carbon tax aimed at cutting energy consumption, which was annulled by the Constitutional Court just 48 hours before it was due to come into force.

France’s highest court stunned President Nicolas Sarkozy’s government late on Tuesday by ruling against the tax, saying there were too many loopholes benefiting major industrial polluters.

The new tax was expected to raise 1.5 billion euros ($2.15 billion) next year and the court’s decision will put added pressure on the budget deficit, already forecast to come in at a high 8.5 percent of gross domestic product in 2010.

Ministers promised to present a revised text on January 20 but it could take weeks more to get the law back through parliament and badly needed cash flowing into state coffers.

“The government is going to persevere. It is a tough fight, but a worthwhile one,” government spokesman Luc Chatel told LCI television. “France has to remain in the forefront of the battle to protect the environment,” he added.

The carbon tax was promoted by Sarkozy as a cornerstone of his fiscal and environmental policy. It was set to come into effect on January 1, by imposing a levy on oil, gas and coal use amounting to 17 euros per ton of carbon dioxide emissions.

However, many of France’s biggest industrial polluters, as well as truckers, farmers and fishing fleets, were offered generous discounts, or exempted altogether.

The government argued that many of these sectors already faced European Union curbs and should not be placed at a disadvantage to their international competitors.

The Constitutional Court objected that 93 percent of industrial carbon dioxide emissions would be exempt, saying the measure would do nothing to combat global warming and went against the spirit of fostering equality amongst tax payers.

The opposition Socialist party had long complained that the tax would unfairly penalize low earners and crowed victory.

“This is a good decision and shows once again that Sarkozy’s way of doing things does not work,” Socialist parliamentary party leader Jean-Marc Ayrault told France Info radio.

“They announce a reform, listen to no one and produce a poor job. It’s a real mess … now they will have to start from scratch and oversee a fiscal reform that is more ecological and does more to protect the environment.”

The junior minister for trade and consumption, Herve Novelli, said the revised tax would offer fewer loopholes.

“It was perhaps shocking that the sectors given exemptions were those that polluted the most … We will therefore need to remedy that,” he told Europe 1 radio.


Hispanic Business Reports (30 December 2009):
Brazilian President Luiz Inacio Lula da Silva signed into law the motion on the establishment of the country’s national policy on climate change. The motion got three vetoes before being signed by the president. The new law maintains the goal of reducing the national emission of greenhouse gases by between 36.1 percent and 38.9 percent by 2020, despite opposition from the country’s ministries of energy and environment. 

Brazil emitted nearly 1.47 billion tons of greenhouse gases in 1994. Emission figures for last year were not available. Environment Minister Carlos Minc said that in meetings of local authorities scheduled for early 2010, academics and entrepreneurs would be drawn into discussing the targets of emission cuts in every sector to be included in the presidential decree. 

The energy ministry vetoed the proposed replacement of fossil fuel energy resources in the country. 

Activists have suggested that Brazil’s 2007-2010 investment program did not pay enough attention to the issue of climate change. The program, known as the Growth Acceleration Program, invests nearly 250 billion U.S. dollars in oil production as well as in hydroelectric plants, nuclear energy plants, and plantation of oil- bearing crops to produce biofuels. 

The investment also goes to road construction, enlargement of sea ports and airports, and shipbuilding. 


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