New carbon tax could raise €4bn

A CARBON tax planned to be introduced in 2016 is expected to raise €4billion, but the government says it will not be an additional tax but a diversion of money already raised.

The move to tax pollution by “greening” other taxes, is being announced today at the government’s second environmental conference in Paris.

People using carbon-producing fuels such as petrol, diesel, gas, heating oil and coal would have pay the tax, which will be linked to a “carbon price” set by the government. In 2014 this will, according to Le Monde be set at €7 per tonne of carbon.

However, following President Hollande’s statement on TV last weekend that “whenever there is a new environmental tax introduced another should be reduced” the government intends to substitute the new tax for an older tax already in place.

For diesel, there is a TICPE tax that makes up 48 centimes of the €1.37 price of a litre and part of this would be replaced by the new carbon tax.

The carbon price will be increased substantially once it is in place – and could raise €4bn by 2016 – with the aim of getting users to cut down their use of fuels that emit the greenhouse gas carbon dioxide.

By 2016 the price of diesel could increase by 10 centimes in 2016 because it creates 15% more CO2 than petrol, which would see a price rise of just two centimes.
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