French President Nicholas Sarkozy's flagship carbon tax has been struck down by the country's top court as unjust and counterproductive to the fight against climate change.

The Constitutional Court on Wednesday (30 December) ruled that the law, announced in September and due to enter into force from 1 January, had included so many loopholes that some 93 percent of industrial greenhouse gas emissions would have been exempt.

The judges found that this placed the overwhelming burden of the tax, set at €17 per tonne of CO2 emitted, on households instead of industry.

"The large number of exemptions from the carbon tax runs counter to the goal of fighting climate change and violates the equality enjoyed by all in terms of public charges," the court ruling read.

"Less than half of all greenhouse gas emissions would have been covered by the [tax]," the ruling continued, "totally exonerating from the tax the emissions of power plants, the emissions of 1,018 of the most polluting industrial sites."

The tax thus would have targetted primarily fuel and heating, "which are only one of the sources of carbon dioxide emissions."

The plan would have brought in an estimated €4.3 billion to government coffers annually, although the scheme would have redeployed some of these monies by cutting income taxes and delivering "green cheque" dividends to poorer citizens hit by the increased fuel and heating prices.

Prime Minister Francois Fillon said the government would try to redraft the law, but analysts believe that the ruling strikes at the heart of the law's principles, and that a light "editing job" will be insufficient to win over the judges.

Socialist Party grandee Segolene Royal cheered the ruling, calling the law "ecologically ineffective and socially unjust."

The Greens for their part back the principle of a carbon tax but welcomed the ruling, believing Mr Sarkozy's version of such a tax inegalitarian.

Some environmentalists however were disappointed, worrying that the court had dealt a severe blow to any sort of taxation of carbon in the future.

The Nature and Environment Federation of France (FNE) described the ruling as a "catastrophic decision."

EU Observer