SARKOZY WANTS CARBON TAX

It is not just that Sarkozy, a free-market advocate, called for a carbon tax. It is not just that he called it a “climate-energy" tax. It is not just that he suggested imposing it and using the revenues to ease labor taxes.

It is that he also called for a levy on goods imported to European markets from countries not participating in the Kyoto Protocols. This would potentially shift the burden for emissions to consumers of the emissions-generating products. It is probably the smartest way to go.

And, in the US, it has no political possibility whatsoever.

Climate change: Sarkozy backs carbon tax, EU levy on non-Kyoto imports
Emma Charlton, October 25, 2007 (AFP via Yahoo News)

WHO
French President Nicolas Sarkozy; Jose Manuel Barroso, head of European Commission of the European Union; Al Gore, Nobel Peace Prize laureate & former US vice president;

WHAT
Sarkozy called for a “climate-energy” tax to cut greenhouse gas (GHG) emissions while endorsing a series of proposals emerging from an in-depth forum on environmental issues his government sponsored.

Much of the value from a carbon tax depends on how the revenues are used. This study by Japan's National Institute for Environmental Studies shows real GDP falling if revenues are rebated to taxpayers (green) and if revenues are used for government expenditure. But if revenues are used to pay down the national debt, real GDP rises. (click to enlarge)

WHEN
The forum was held over 4 months. The proposals emerged in the last 2 days. Sarkozy’s speech was at a “closing ceremony” held October 24.

WHERE
Sarkozy’s proposal would affect not just France but all European Union countries and their trading partners. Notable non-Kyoto nations include the US, Australia, China and India.

WHY
- The purpose of the forum and of Sarkozy’s tax proposal is to cut GHG emissions. The forum brought together representatives of government, industry, labour and the environmental movement.
- Proposals from the forum included a freeze on the building of new highways and airports, a plan to shift freight traffic from road to rail, a plan to cut pesticide use 50% in 10 years, extension of tram and high-speed trains, incentives for cleaner cars and more energy efficiency measures in building design and construction.
- Forum participants suggested the taxation cutting emissions could be kept “painless” by applying revenues to reduce Labour taxes.
- Sarkozy promised a freeze on genetically modified crops.
- Sarkozy made no commitment to cutting France’s enormous consumption of nuclear energy for electricity.

Nobody has found a way to use the revenues that would make a new tax appealing to voters. (click to enlarge)

QUOTES
- Sarkozy: "I want this forum to be the founding act of a new kind of politics. An environmental new deal in France and the world…We need to profoundly revise all of our taxes... to tax pollution more, including fossil fuels, and to tax labour less."
- Sarkozy to Barroso and the EC: "I suggest to you that in the next six months, the European Union discuss the implications of this unfair competition…"
- Gore, recognizing Sarkozy for holding the forum: "Today you become known as a great friend of the people of this planet…"
- Sarkozy, to the forum participants: "Your ideas, I make them my own. I will support them and I will carry them out…"
- Arnaud Gossement, spokesman, France Nature Environment: "For the first time, we have a president who does not pit economy, growth and ecology against each other... even though he was elected on a pro-growth platform…"