Sunday, February 04, 2007

France Threatens Carbon Tax

France's President Jacque Chirac is now threatening to impose a carbon tax if the US does not sign the Kyoto Accord when it runs out in 2012:
[Chirac] warned that if the United States did not sign the agreements, a carbon tax across Europe on imports from nations that have not signed the Kyoto treaty could be imposed to try to force compliance. The European Union is the largest export market for American goods.

“A carbon tax is inevitable,” Mr. Chirac said. “If it is European, and I believe it will be European, then it will all the same have a certain influence because it means that all the countries that do not accept the minimum obligations will be obliged to pay.”

Trade lawyers have been divided over the legality of a carbon tax, with some saying it would run counter to international trade rules. But Mr. Chirac said other European countries would back it. “I believe we will have all of the European Union,” he said.
Since most nations who signed the Kyoto protocol are failing to live up to the agreement, I wonder what basis there will be for this tax. Of course, I doubt a trade war will be sparked in 2012 by this proposal. It would further cripple the EU's economy and cause consumers to pay more for everything. In effect, Chirac proposes punishing his own citizens with his tax. I wonder how they will like it?

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