French government panel to urge fuel carbon tax: report

PARIS (Reuters) - A government-appointed group of experts will submit proposals for a carbon tax on fuel from January 1 2010, French daily Les Echos said on Wednesday, as the government seeks ways to reduce emissions of greenhouse gas.

Under the recommendations, France would bill 32 euros for every tonne of carbon dioxide emitted in 2010 and lift the levy to 100 euros per tonne in 2030, the paper said, citing extracts from a report to be handed to the government on Friday.

This would add 0.077 euros ($0.11) to the cost of using one liter of non-leaded fuel next year and 0.085 euros to that of one liter of diesel, the paper said.

The government would need to endorse the recommendations, overseen by former Socialist Prime Minister Michel Rocard, who has headed efforts to look into climate and energy issues.

“I stress that this is a proposal and that the government will be master of any decision it will take...,” Rocard told France Inter radio.

Rocard will also suggest that low-income households benefit from partial and temporary offsetting measures, Les Echos said.

The report did not rule out the possibility of compensating some sectors of the economy that would be the most affected by such the move, notably truck drivers and farmers.

French truckers would be particularly sensitive to any rise in the price of fuel. Last summer, French truckers and fishermen staged a series of protests over soaring oil prices and pressure the government into helping them cope.

Any carbon tax on fuel would help replenish government coffers at a time when state finances, long in deficit, are deteriorating rapidly as a result of the global economic crisis.

In an apparent attempt to deflect criticism that the government might motivated by financial needs, Rocard said:

“We are going to tax certain behavior, mainly that of using fossil-derived energies which, when burned, produce greenhouse gases...,” Rocard said on France Inter.

($1=.7039 Euro)

Reporting by Tamora Vidaillet and Laure Bretton; Editing by Jon Boyle