Humiliation for green convert Sarkozy as carbon tax ruled unconstitutional

French court judges tax would punish households while letting off big industrial polluters

Lizzy Davies in Paris
guardian.co.uk, Wednesday 30 December 2009 16.13 GMT
Nicolas Sarkozy's dreams of putting France on the frontline of the fight against global warming were in disarray today, after his flagship carbon tax was ruled unconstitutional two days before it was due to come into effect.
In an unexpected and embarrassing blow, the court responsible for ensuring the validity of French legislation rejected the reform as ineffective and unfair.
It ruled that rather than being the revolutionary measure Sarkozy promised, the tax would have let off many industrial polluters, while placing a disproportionately heavy burden on ordinary households.
"The large number of exemptions from the carbon tax runs counter to the goal of fighting climate change and violates the equality enjoyed by all in terms of public charges," said the constitutional council in its eleventh hour ruling last night.
Scrambling to salvage a project which the President had vigorously defended against criticism from opposition politicians, green groups and members of his own party, the government insisted today the carbon tax had not been put off for good. "It is a tough fight, but a worthwhile one," said spokesman Luc Chatel. Ministers promised a revised text within weeks.
However, there was little the government could do to distract from the humiliation of having a much-trailed reform batted back by the sages of the august constitutional council.
Nor will the hopes of a new and improved plan do much to calm heightening worries over revenue. Even if a revised proposal is made, the tax – which was expected to raise €1.5bn (£1.34bn) during 2010 – will take weeks to reach parliament again and even longer to start boosting state coffers.
The opposition Socialist party made no secret of their glee at seeing the right-wing president fall at the final hurdle of his marathon battle to introduce a tax which was opposed by two-thirds of the public.
"This is a good decision and shows once again that Sarkozy's way of doing things does not work," the Socialist party's parliamentary leader, Jean-Marc Ayrault, told French radio. "They announce a reform, listen to no one and produce a poor job. It's a real mess."
Sarkozy, who has championed the environmental cause with increasing vigour since the strong performance of the French Greens in June's European elections, set out his vision for the carbon tax in September with the zeal of the ecological convert he claims to be. "It's a question of survival of the human race," he said. A tax of €17 (£17.22) per tonne of carbon emissions would have been levied on oil, coal and gas consumption.
But, while green campaigners warned the tax was not high enough to be effective, the Socialists and consumer groups claimed it would lead to an unfair situation in which certain people, such as car-dependant households in isolated areas, would be hit harder than the real culprits.
The ruling of the constitutional council appeared to support those criticisms. It said that more than 1,000 of France's biggest polluters could have been exempted from the charges, and that 93% of industrial emissions would not have been taxed.
However, many big polluters are required to participate in the EU emissions trading scheme, in which they must buy carbon permits if they exceed pollution targets.
Speaking on French radio this yesterday morning, the junior minister for trade and consumption admitted mistakes had been made. "It was perhaps shocking that the sectors given exemptions were those that polluted the most," said Hervé Novelli. "So we will have to put that right."
Sarkozy, who is returning tonight from a Christmas break in Morocco with his wife Carla Bruni, has made no public comment on the setback. But Chantal Jouanno, the junior minister for ecology, said he remained "very determined" to get a carbon tax into law before the summer.