French constitutional body nixes carbon tax

PARIS - France’s Constitutional Council ruled that a planned carbon tax cannot come into force as it includes too many exemptions.

The tax, which was planned to enter into effect Jan 1, was a centrepiece of President Nicolas Sarkozy’s climate initiative. The rejection represents a setback for the government.

The council said in a statement late Tuesday that the exemptions included in the carbon tax ran counter to the aim of fighting climate change and created taxation inequalities.

French consumers were meant to be encouraged by the tax to use less fossil fuels.

Prime Minister Francois Fillon announced there would be an amended version, taking into account the ruling, by Jan 20, French radio reported.

In its ruling, the council criticised the fact that industrial-origin carbon dioxide emissions would be almost totally exempt, letting some of the worst polluters, such as refineries, off the hook. Also it contained relief for farmers and other groups.

The law has been criticised for hurting residents of rural areas with little public transport and poor families.