We use Google Analytics to see which pages are read and how the site is used, so we know what to improve. This only runs if you accept. See our privacy notice for details.

Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Carbon tax trajectory

Summary

Michael Harty criticised the absence of a carbon tax increase and asked what the Government intended to do next. The Taoiseach said he supported carbon tax in principle, explained why it was not increased in the budget, and floated an all-party approach to setting a 2030 trajectory.

I refer to yesterday's Budget Statement and the absence of a carbon tax. The Minister for Finance stated: "It is my intention to put in place a long-term trajectory for carbon tax increases out to 2030". He went on to say: "The publication of a special report from the UN's IPCC, underscores the need for resolute action [across all areas of public policy] to meet our commitments under the Paris Agreement." Yet in the budget yesterday there was no reference to carbon tax or even a modest increase in carbon tax. The UN panel is clear. A future of mass migration, mass extinction, famine, flood, catastrophic storm and end of life as we know it is staring us in the face and we must act now. We are only 12 years away from a global warming of 1.5° Celsius above pre-industrialised levels. Debra Roberts, a co-chair of the IPCC working group, stated:

It's a line in the sand and what it says to our species is that this is the moment and we must act now ... This is the largest clarion bell from the science community and I hope it mobilises people and dents the mood of complacency.

Christiana Figueres, the former UN climate chief, stated:

There is nothing opaque about this new data. The illustrations of mounting impacts, the fast-approaching and irreversible tipping points are visceral versions of a future that no policy-maker could wish to usher in or be responsible for.

Carbon pollution needs to be reduced by 45% by 2030. The scientific evidence is available. The reality of climate change is here. What is missing is the political will and the courage to act. In yesterday's budget, there was no reference to a carbon tax. Jim Skea, a co-author of the report from the UN panel, stated:

We show it can be done within laws of physics and chemistry. Then the final tick box is political will.

Does the Taoiseach have the political will to introduce carbon taxes? It appears from the budget yesterday he does not. The true cost of carbon, if accounting for warming impact, is likely to be between €150 and €200 per tonne. It is currently taxed at 10% of that. The result is a significant IOU for future generations. What is the Government's response to introducing carbon tax and controlling our emissions? When will the Government bring forward proposals to the House for a climate budget incorporating an effective carbon tax and a programme for critical infrastructure and market system change to avoid going above the 1.5° Celsius target of global warming?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

I support carbon taxes as a concept. In fact I support them as more than a concept. I was a member of the Government in 2013 that introduced and legislated for carbon taxes in Ireland, something which, interestingly enough, was opposed by people who are now calling for it. We took a decision as a Government, for a particular reason, not to increase the carbon tax in this budget. It is important to bear in mind what carbon tax means. It means increasing the prices of diesel, petrol, home heating oil, solid fuel such as a bag of coal, electricity and natural gas. What we have seen in particular over the past couple of months is rising energy prices as a result of international factors. The price of a barrel of oil has gone up. As anyone will say, the cost of energy, the cost of filling one's tank with home heating oil and the cost of paying one's electric bill have gone up anyway in the past couple of months. We project it will continue to rise over the next couple of months, even without a carbon tax. I am also conscious that this has been a bad year for farmers and, therefore, a difficult year in rural Ireland, including places such as Clare. I am also conscious that Brexit is coming and that it could have an impact on our haulage industry. Having a carbon tax with carve-outs for agriculture and haulage makes a nonsense of a carbon tax because agriculture and haulage are responsible for so much of the emissions. We decided on this occasion to pursue other green taxes. For example, we have increased VRT on diesel vehicles because we want to discourage people from buying them. A big error was made in green taxation by a previous Government, which thought that encouraging people to buy diesel cars would be good for the environment and for health. It was not. We now know that diesel cars in cities do as much damage to the environment and produce as much CO2 as petrol cars. We know that diesel cars damage people's health because of SOx and NOx emissions. That is what happens when a Government gets green taxes wrong. A previous Government did that. We took a decision to do something to reverse that in this budget by making it more expensive to buy new diesel cars. I have explained the reasons why we did not think it was appropriate on this occasion to increase the carbon tax because the prices of all of those things have already risen dramatically in the past two months and are likely to rise in the next few months even without a carbon tax.

Comment on this

What I wanted to find out from the Taoiseach was what his intention is in the future. The Minister for Finance said it was his intention to put in place a long-term trajectory for carbon tax increases out to 2030. I understand carbon tax is not the answer to global warming but it gives an expression of intent. How are we supposed to reach our commitments under the Paris Agreement if we are not going to take action on carbon emissions? Ireland should be a leader on the issue of climate change; it should not shirk its responsibilities. We are behind in reaching our 2020 targets. I understand substantial fines will be imposed on Ireland if we do not reach our targets. The cost may have to be taken up in a different manner in respect of fines rather than in addressing the issue. The issue revolves around transport, agriculture and home heating. We must bend the curve.

We must try to make the effort. What is the Taoiseach's intention to address this matter in the future?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

We would like to agree on an all-party basis, through the Joint Committee on Climate Action, a target price for carbon for 2030 which would probably be €80 per tonne, but I do not want to set it here, and the trajectory by which we will get to that point. I would very much like that to be agreed on an all-party basis. It is not dissimilar to introducing water charges. When people see what this will mean it will require a political consensus to make it happen and a real campaign for the public to understand it. At the moment the carbon tax is €20 per tonne. If we go to €80 per tonne we will bring about very significant and permanent increases in the cost of living for the majority of people. It will be much more expensive to run a car, heat a house and to use electricity. That will have impacts, particularly on older people and on rural communities. It will be much more expensive to run a business. There will be real issues for farmers and for haulage. We have seen in Australia, for example, how governments failed to do what we would like to do because of the politics surrounding it. The best way to make this happen is to agree on an all-party basis that we are going to do this and for every party to sign up to how we phase it in between now and 2030 so that we can stand together in explaining to the public why this is the right thing to do.

Comment on this