France Must Cut Reliance On Oil: Hollande
From The Peninsula Qatar
PARIS: France should aim for a 30 percent cut in fossil fuel use by 2030, President Francois Hollande said in a speech yesterday which included plans for a carbon tax from 2014 and a tax break on home insulation to help consumers save energy.
Hollande faces a delicate balancing act as he reconciles demands for more binding environmental targets from his Green Party coalition partners with French households and businesses increasingly wary of tax rises.
Elected last year pledging sweeping energy reforms, Hollande said the cut in fossil fuel use from current levels was needed to meet the country’s goal of halving overall energy use by 2050.
“Europe must set an example,” he told an energy conference in Paris. “It’s an objective that can stir us, but will have to be adjusted to our growth performance and will suppose major technological innovations.”
Prime Minister Jean-Marc Ayrault is expected to provide details on the proposals on Saturday when the two-day conference ends, while fiscal details are likely to be inserted in France’s budget bill to be presented next week.
Hollande said France would introduce a carbon tax in 2014, but stopped short of confirming French media reports that the new levy could raise ¤500m next year and up to ¤4bn in 2016. Britain announced a carbon tax in April.
“If this tax is created by decreasing other levies, why not?, but if this is a way to raise taxes overall, then no,” said Pierre Gattaz, head of French business lobby Medef.
Hollande added that proceeds from the new “energy-climate contribution” would be redistributed through lower taxes elsewhere.
He proposed a cut in value-added tax (VAT) on home insulation work to five percent from seven percent currently to increase energy efficiency.
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