Carbon pricing debates are ridiculous: France
It wasn’t long ago that policy analysts in North America were circling around each other arguing which was the better policy for pricing carbon: Implementing a cap-and-trade system that would regulate large emitters but give them the flexiility to meet them by trading emissions credits; or setting a carbon tax on all greenhouse gas-producing fuels so that everyone pays the price of pollution?
As the North American debate winds down more or less in favour of implementing a cap-and-trade system sooner than later, the Europeans are having a completely different and far more advanced discussion on the role of taxation on carbon.
Earlier this month the French government announced that it would lift the Value Added Tax on all EU cap-and-trade emissions credits. Since carbon credits in France are considered financial transactions and not goods, the French government decided to treat EUAs (EU Allowances) with the same value that they do with securities like stocks and bonds. Since credits can be traded and retraded until an entity decides to retire them and enter them into their final carbon footprinting account, taxing each sale of emissions credits might be used to provide tax benefits.
Simultaneously, the French government also announced plans to place a carbon tax on energy-hungry products by 2011 in order to reduce emissions at the consumer level, not dissimilar in scope to the carbon tax currently existing in British Columbia and those being debated across North America right now.
Here’s hoping that these policies in France can guide the carbon pricing debate away from the zero-sum catfight between proponents of cap-and-trade versus carbon taxation in North America. Tens of thousands of green jobs are on the line.
