The French National Assembly and the Senate voted in October and November to pass a proposal to tax carbon dioxide emissions from 2010.

From January 1, the French government will apply a tax of 17 euros (25 U.S. dollars) per ton of emitted carbon dioxide.

Although the law is now in place, debate continues about the merits of the tax. And the government's intention to impose carbon tariffs to offset the effects of the tax have attracted international interest.

France's President Nicolas Sarkozy delivers a speech on carbon tax during a trip in Artemare, southeastern France.[AP]

What is carbon tax

A carbon tax was first proposed by French President Nicolas Sarkozy two years ago, calling it a "Climate-Energy Tax". While issuing the finalized version of the tax proposal on Sept. 10 this year, Sarkozy said that, to respond to climate change, shrink the country's reliance on oil and update the pattern of the country's economic growth, the government needed to introduce some adjustments for the establishment of a genuine ecological tax code.

He said successful experiments had already been done in some Northern European nations.

Sarkozy stressed the imposition of the tax wasn't to benefit the government's budget but to change the patterns of fuel consumption by both families and firms.

Due to the tax, families could enjoy cuts or exemptions in income tax and social welfare tax while enterprises would be compensated for investment.

Much of the electricity in France is generated from nuclear and hydropower plants, discharging far less carbon dioxide. Therefore, the electric power generation sectors of France are free of carbon tax.

Sarkozy also proposed to set up an independent committee composed of non-government individuals, environmental protection groups, experts and parliamentarians, to guarantee transparency of the tax collection and incentive.

He added that the French government would also vigorously promote the use of renewable energy.

Arguments within

Public opinion strongly opposes such a tax proposal even though Sarkozy has consistently explained the tax collected will be returned in the end to taxpayers in different forms without burdening them further.

More than 70 percent of the French people expressed their disapproval of the tax, according to some polls. They deemed it would further eat into family budgets as the tax touched almost all aspects of their daily lives, such as oil prices.

The French Oil Industry Union indicated in October this year that the carbon tax would increase the prices of petroleum and diesel by 3.8 percent and 5.1 percent, respectively. With the addition of other new taxes, diesel would increase by close to 10 percent.

Many French also said the companies which polluted the environment should be responsible, not individuals.

However, the business sectors are also voicing their complaints. They say the carbon tax will jeopardize their international competitive edge and harm the companies' future development.

Tippler's delight not in wine

Despite the overwhelming opposition, Sarkozy has stuck with his decision to impose a carbon tax. Besides carrying out the policy in France, he also called for carbon tariffs on the borders of the European Union.

He said France was making efforts to reduce emissions while other countries could take advantage by producing products and exporting them to EU countries without honoring their commitments to reduce carbon dioxide release.

He added that this phenomenon was unacceptable for France, whose climate and employment would suffer.

Sarkozy said he was ready to commit himself to setting the same carbon tax in countries and regions outside EU, adding that an international carbon tariff was reasonable compensation for the national carbon tax.

Currently, Sarkozy is still lobbying some EU countries on the tariff, including during meetings with Spanish Prime Minister Jose Luis Rodriguez Zapatero and German President Horst Koehler.

Analysts point out France is a traditional nuclear energy user, with a low level per capita emissions. If it was strict with the standard of carbon dioxide emissions, it would have great advantages worldwide.

Recently, the French government has been trying gradually to acquire consensus inside the EU on turning the carbon tax into a carbon tariff.

However, achieving this will be a complex process because of the different emissions of EU countries. For example, Germany's emissions are much larger than France's. That's why the German government has been circumspect in its language when addressing the carbon tariff issue.