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 (US$25) 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.

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 September 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.