Bloomberg has the latest on an interesting ruling by the French High Court rejecting a government-proposed carbon emissions tax. Notably, the Court's decision was based more on fairness concerns than any global warming theories, with socialist elements of the political spectrum supporting rejection of the law.
Damaging the bill's chances, and raising the ire of the masses, were numerous business-friendly exemptions which meant that nearly 93% of all carbon emissions in France would have been immune from taxation. The remaining burden would have fallen primarily on drivers and those using heating fuels. This conclusion, among others, is what lead to the Court's rejection of the legislation, as this burden on workers amounted to inequitable treatment under the tax code. It is important to note that the Court also mentioned that taxing only 7% of emissions meant that the bill did not meet the 'objective of fighting global warming.' Therefore, it stands to reason that if the bill were changed to include a broader spectrum of polluters, making it fairer under the tax code and better suited to reaching its stated goals, the Court would allow it to stand.
The Sarkozy government has pledged to change certain provisions and put the bill forward again as early as January. Though such things are unpredictable, and assuming a new bill does come forward, the four following outcomes have the greatest chance of occuring. First, the court could reject the renewed attempt based on entirely new factors. Second, the government could make sufficient changes to get the bill past judicial scrutiny and signed into law. Thirdly, the Court, despite some changes, could reject the bill on fairness grounds again. Finally, the government could change the bill so much that it becomes impalpable for business and the return/addition of provisions for the taxation of businesses becomes its downfall before it even arrives at the high court. Of course these options are based on a basic understanding that the Court will seek a certain threshold of fairness under the tax code before it will allow any legislation through as well as an acceptance of the notion that so many exceptions were granted to start with due to the lobbying efforts of the business community.
The first possibility does not seem to be likely as the government has guidance on what needs to be changed, and will therefore be unlikely to go too far astray of what the Court might allow. The second outcome also seems less than likely because of the Court's concerns for fairness and the low probability that cosmetic changes alone will make the critical difference. The last two outcomes therefore appear the most likely. A second rejection by the Court due to lack of meaningful change is self-explanatory, and would likely mean the demise of legislation for the time being as neither the court nor the business community would be willing to give much ground on their positions. The final option, business opposition, seems the most likely outcome. This is because in order for the government to make enough changes to pass judicial scrutiny, the very exceptions that made the bill palpable to the business community would evaporate and lead to widespread opposition, claims of economic collapse and the fear of rampant unemployment as business profits are cut and doors are shut. It is not worthwhile to suggest that wholesale changes would be made and brought to the court despite business opposition, because otherwise exemptions would not have existed in the first place.
This final outcome is the most interesting bit of this French story for lawmakers abroad, and the main reason why this site has advocated for making economic priorities the foundation for greenification in the past. Indeed China has taken this approach with great success. It is not very difficult to imagine big business and political grumbling about carbon taxes in the US, the UK or elsewhere, mostly because there are numerous examples of it. Many believe that this was at least in part the impetus behind President Obama's weak stance in Copenhagen recently. Perhaps the final lesson is, whether in the US or abroad, there will be no support of green solutions from business until the economic incentives are great enough. Until then, and with the failures of Kyoto and Copenhagen obvious for all to see, we can only hope that climate skeptics are on the right side of this current global debate.
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