Rhein on Energy and Climate

Against all odds, France is rapidly taking the pole position among EU member countries in the battle against climate change.

It was under the French EU Presidency in the second half of 2008 that the EU succeeded in adopting its climate packing providing for a 20 percent reduction of its green house gas emissions by 2020.

More than half of these reductions will have to result from actions to be taken by individual member states. Member states have to take action in particular concerning energy efficiency in buildings and industry, renewable energies and, partially, automobiles.

To that end, member states are held to prepare national action plans defining the path by which to reach their reduction targets.

France is determined to go ahead fast. It has already acted on automobiles and buildings and is preparing the introduction of a C02 tax for 2010

  • France disposes among the most fuel- efficient automobiles world-wide. The average size of cars is smaller than in most member states, due to high fuel prices and road-user fees. In 2008, it has introduced additional incentives for the purchase of low emission vehicles. The purchase of a car emitting <130 g C02/km benefits from premiums of € 200-5000, while purchases of cars emitting >160 g C02/km) are subject to penalties of € 200-2 600. This system goes under the name of “bonus-malus”.In 2010, the French government will extend the “bonus-malus regime” to its Administration. Ministries will have to undertake energy audits for their buildings by 2011 and to convert their car parks to low-emission models. Less than 20 percent of the new cars they will buy or rent in 2010 will be allowed to exceed C02 emissions >130 g/km!
  • France has also started, though belatedly, to introduce fiscal incentives for improving thermal insulation of buildings and installing C02 avoiding equipments, from wood-burning stoves to solar heat collectors and PV panels for decentralised power generation. Since April 2009, it offers zero-interest loans for improving energy efficiency in buildings. 150 000 such loans have been granted since, quite an achievement in a country whose citizens have traditionally not shown much interest for the preservation of the environment. Visibly, the mood in France is changing since the fight against climate change has become a top priority for the conservative government.
  • The most exciting measure to curb fossil energy consumption and C02 emissions is the intention to introduce a C02 tax in 2010. To that end, the government had asked former PM Michel Rocard to elaborate proposals for such a tax. He has presented his report on July 28. It contains draconian proposals. France should introduce such a tax in 2010 at an initial rate of € 32 tons rise annually by 5 percent so as to reach a level of € 50 in 2020 and € 100 in 2030. These rates correspond to a rise of gasoline taxes of 7 cents in 2010 and 21 cents in 2020.Such a proposal would be perfectly in line with the most recent call by the Swedish Presidency for the introduction of C02 taxes by all member states.In the last few weeks the debate on this proposal has advanced. The government abides by it, but mollifies the impact. As the debate stands in early September, the initial rate to be set for 2010 will be no higher than € 14, corresponding to the present C02 market price. The revenue accruing from the C02 tax will help to lower the high tax and social security charges. Its impact on citizens will therefore be neutral, as it ought to be.

The tax will be complementary to the EU-wide emission caps on the power sector and energy-intensive industries. These will be exempted. So will be electricity consumed by households, an exemption rightly criticised be the French Greens.

Hopefully, the government will take up the Rocard proposal to provide for an annual increase in view of sending a clear signal to all energy consumers that the era of cheap fossil energy is over and that they better brace for higher energy prices, in particular for running their automobiles and heating their houses.

All EU member states would do well to take a closer look at the French bilateral recipes for coping with climate change.

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