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

Climate plan and carbon tax timing

Summary

Deputy Eamon Ryan urged the Taoiseach to commit now to a carbon-tax trajectory as part of the national climate and energy plan. The Taoiseach said climate action must combine tax, regulation and investment, indicated he was open to the Canadian-style model with revenues returned through tax credits and welfare, and said the numbers still need to be done.

My leader's question is to Deputies Micheál Martin, McDonald and Howlin and any other leader or Deputy here-----

Comment on this

Is Deputy Ryan asking the question of himself?

Comment on this

-----and to the Taoiseach and myself.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

Is Deputy Ryan talking to himself again?

Comment on this

I ask myself in the sense that we all have responsibility. The Taoiseach said the time will come some day when he is willing to say what he wants to do on climate. I believe that day is today. We cannot put it off any longer. It is today because we, in the Committee on Climate Action, can see the scale of the challenge in front of us. Under European law, we have to publish the first draft of a new national climate and energy plan by Christmas to be agreed by the end of next year. We need to know what we are going to do on carbon taxation in drafting that plan. Does anyone disagree with that? How can we work out all the other measures if that measure is not in place? It is one we have control over.

I have a proposal for Deputies Micheál Martin, McDonald and Howlin, and to be honest, if Fine Gael wishes to abstain from this issue, it would speak volumes. Let the Taoiseach make that decision himself. My proposal is similar to what the Taoiseach just said, that we would introduce an increase in carbon tax where every single cent would go straight back to the people in the form of a dividend, whether through the social welfare system, the tax system, or a cheque in the post. In the climate committee last week, we asked the Secretary General of the Department of Finance to come back to us by 30 November with an outline of how that could work. My proposal and question is whether we can agree in that committee the following measure, that next year we should introduce an increase of €20 in the level of carbon tax, and that, in each subsequent year, there would be an increase of €5 up to 2030 which would set the level at €90 per tonne by that time. It gives predictability, follows best policy advice and, critically, the money goes back to the people on any increased revenue.

We would use the existing carbon tax mechanisms in the way the Government has already planned, so there would be no additional costs or bureaucracy and this proposal would be relatively easy to introduce. Critically, it would also be progressive as the analysis shows that it would deliver a more significant return for those on lower incomes than for those on higher incomes because the latter tend to consume more.

What we learned from the ESRI yesterday is that the tax on its own would be nowhere near enough. There are massive projects we need to carry out. I would love if we started by commissioning Bord na Móna to do a major project of converting Irish homes from oil and gas-fired central heating to heat pumps and installing solar panels, insulation and electric vehicle charging points, particularly in the west, south west and north west and in rural areas. We would save further through that approach.

We need to know what the Taoiseach is going to do on carbon. If the other party leaders cannot answer, I hope they will be able to do so by 30 November when the joint committee will meet to consider the Department of Finance's note on the ESRI study. That is a question we all have to answer today, not at some time in the future.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

We all agree that tackling climate change requires a suite of measures that must all tie in together and speak to each other. It has to be about tax and regulation, but also investment. We have set out a large part of the investment piece in Project Ireland 2040, but that will only bring us about one third of the way to meeting our targets for 2030. It will involve measures such as investment in renewable energy; taking coal out of Moneypoint in 2025; getting out of peat, and the Deputy will have seen what is happening in that regard already; retrofitting homes, schools and buildings; electric vehicles; investment in public transport measures such as MetroLink, BusConnects and other projects around the country; and big changes in agriculture, for example, much more forestry and investment in technologies such as beef genomics.

Tax has to be a part of this. It is an area we need to get right. I am conscious of what happened in Australia where the government tried and failed to bring in a carbon tax and the country has been set back by ten or 20 years as a result. It was a little like what happened here with water charges. I see what is now happening in France where President Macron is facing massive protests for increasing taxes on fuel. If we are going to do this, let us do it successfully. Let us get it right and learn from the mistakes of other countries and the mistakes we made in trying to introduce water charges, which was the right thing to do from an environmental point of view. The model I personally favour is that which Prime Minister Trudeau is pursuing in Canada. I had a chance to speak to him about it around two weeks ago.

Comment on this

The Taoiseach is closer to Trump than Trudeau.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

The model proposed in Canada is very similar to the one Deputy Ryan is suggesting. The Deputy set out a trajectory for increasing carbon tax by certain increments up to 2030 to reach an agreed price, perhaps something like €80 per tonne, which is the amount suggested by the Climate Change Advisory Council.

Comment on this

The Department of Public Expenditure and Reform is talking about €230 a tonne.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

However, any revenues gained from the carbon tax would then be given back to the people in the form of tax credits and welfare. I think this is what the Deputy is suggesting and it is something to which I would be well disposed. We need to do the numbers.

Comment on this

There has been plenty of time to do the numbers.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

The Ministers, Deputies Donohoe and Bruton, are working on that now.

Comment on this

The Department of Public Expenditure and Reform has the numbers done.

Comment on this

The Department said the carbon tax should be €230 a tonne.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

The best way to get it done would be to agree it on a cross-party basis because that would take the politics out of the issue. Let us not be dishonest in any way about what a carbon tax means. It means that it will be more expensive for people to fill their cars with diesel or petrol. It will increase the cost of transport for the haulage industry, have impacts on agriculture and make it more expensive to buy electricity and gas. The adaptions that can be made to mitigate those effects will not happen in year one, two or three. Even with the best intentions, it will take time to make them happen and for some people that will never be possible, in many cases because of where they live. The best way to get this done, unlike in the case of water, would be on a cross-party basis and to agree on a trajectory over ten years. I would be up for that.

Comment on this