France is planning to introduce a tax on carbon which if it goes through will come into effect next year. The new tax is aimed at individuals and is supposedly designed to 'encourage' people to reduce their carbon footprints by using less fuel.

The tax will be eased in gradually and will also be levied on small businesses.

According to opinion polls around 75% of France is strongly opposed to the new carbon tax but Mr Sarkozy assured the population in a television speech that the new tax is not designed to "fill state coffers" and will be offset by other tax cuts yet to be introduced.

The good news is that the tax will not apply to electricity as 80% of this is produced by France's array of low emission Nuclear power stations. The bad news is that the new tax will start at around €17 per ton of carbon dioxide emitted. This could raise the price of petrol by around 4 cents a litre and raise the cost of household gas.

Critics believe that the new tax is designed to improve Mr Sarkozy's image in preparation for the UN conference on climate change later this year and to boost France's failing state finances.

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