France Plans New Version of Carbon Tax

By GABRIELE PARUSSINI
PARIS--The French government plans to levy a new version of the carbon tax in the second half of this year, a spokesman said Tuesday, after an initial version of the bill was rejected by the country's highest court.
"The new carbon tax will be effective July 1st," Luc Chatel told a press conference after the weekly cabinet meeting.

A previous version of the bill was struck down by the country's Constitutional Council, which ruled that there were too many exemptions to the proposed tax of €17 ($24.5) per metric ton of carbon emitted. That tax was intended to take effect Jan. 1.
The council's decision was an unexpected blow to President Nicolas Sarkozy, who pledged tougher environmental legislation in his 2007 presidential campaign and emphasized climate change in his victory speech after being elected.
He had championed the tax, which would have been the first such sweeping levy introduced in France in the past 20 years.
It was forecast to generate €4.1 billion for the government.
Earlier Tuesday, Finance Minister Christine Lagarde gave the first few clues of how the new draft would differ from the one rejected by the court. Large companies that pollute heavily would be penalized more in the new draft of the bill, but the rates could vary, while exemptions on electricity would be maintained, Ms. Lagarde told Les Echos newspaper in an interview. "We are considering the possibility of applying reduced rates and of setting up other incentive mechanisms," Ms. Lagarde said.
In the draft proposed late last year, the government exempted over 1,000 highly polluting industrial sites, such as power stations, oil refineries and cement works, because they are already subject to a European Union quota system to be progressively put in place from 2013. According to EU rules, emissions at these sites will have to be cut by 21% by 2020.
Write to Gabriele Parussini at gabriele.parussini@dowjones.com