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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Carbon tax and climate policy

Summary

Mary Lou McDonald challenged the Taoiseach on reports that carbon tax increases were being planned and argued that fee-and-dividend models do not cut emissions or help households. The Taoiseach said no Government carbon tax plan had been published, defended carbon taxation as a long-term driver of cleaner investment, and rejected her critique.

The Oireachtas Joint Committee on Climate Action is meeting today and tomorrow to sign off on its report which is due to be published on Thursday. The Taoiseach, Fine Gael and its partners in Fianna Fáil support increasing carbon taxes and it is almost certain that that recommendation will feature in the committee's report. Regardless, the Taoiseach has indicated that it is, in effect, Government policy. At the weekend he said increasing carbon taxes was on the table for inclusion in the October budget and that increases would be in line with the committee's recommendation of €80 per tonne, or four times the current level.

Climate change is a massive problem. It is perhaps the defining challenge of our generation. There is an all of society acceptance that IT must be tackled and that we are already way behind where we need to be in tackling the issue effectively. The way to fight climate change is not to penalise ordinary families and working people by increasing their fuel costs or utility bills. That is not something Sinn Féin will support. We will not support any increase in carbon tax that will not protect low and middle income earners and ensure the big polluters will carry their responsibilities and pay their way. We already have very high fuel and energy costs in this state and the current carbon tax has not lowered emissions levels. Carbon emissions have, in fact, increased and loading another layer of cost and tax on ordinary people will not change behaviour, yet the Government seems intent on pursuing this course of action. Unless it puts measures in place to give families alternatives, a carbon tax is just a punitive tax and must absolutely be opposed. The Taoiseach should be aware that there are families who are at the pin of their collar. They are just about getting by and should not have to pay the price because of the actions of big corporate polluters. I hope the Taoiseach agrees with that sentiment. We need to see climate change tackled in a progressive way that will combine social justice and fairness with the obvious environmental demands. People need to be able to switch to alternatives. That means that we need a comprehensive retrofitting programme. People need to be able to switch to heat pumps easily, make the change to electric vehicles in a cost effective way and avail of microgeneration. We also need real investment in public transport.

The type of carbon tax the Government is proposing is not the solution. It would be ineffective, regressive and only creates the illusion of action. Can the Taoiseach accept that, as currently devised, the Government's carbon tax plan will impact disproportionately on low and middle income families who cannot afford to switch to electric cars and make their homes more fuel efficient? Will he accept that this approach is wrong and commit to going back to the drawing board and scrapping the Government's regressive and out of touch proposals?

Comment on this
Leo Varadkar The Taoiseach Fine Gael

The Deputy is getting the all-party committee mixed up with the Government and the Fine Gael Party.

Comment on this

The Taoiseach does that all the time.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

Never allow the facts to get in the way of a good political charge. I have published no carbon tax plan. The all-party committee is working on the issue and I hope it will be able to report this week. I also hope we will all give its report a good reading and a fair hearing before coming out against it.

The Deputy will recall that the Government took the decision not to increase carbon tax in the last budget and that we sustained some criticism for not doing so. By the way, we did increase the fuel allowance, but we did not increase the carbon tax and took the decision not to do so for very good reasons. First, VAT was going up in the new year and we did not want to increase two taxes; rather, we wanted to reduce taxes, as we did in the case of income tax and USC, for example. Second, we were very aware of the impact higher fuel prices could have on people who needed to fill their tank and heat their homes, people who used gas and electricity, as all of us do, and people who needed to commute and had no other choice but to commute by car. That is why we took the decision, for which we were heavily criticised, not to increase carbon tax in the last budget.

We do need, however, to take climate action. We are well behind in meeting our emissions targets. We need to catch up and be honest with people. The carbon tax will not solve the problem of climate change, but we will not solve it without a carbon tax. It is and has to be part of the solution. It involves three measures: regulation; investment in public transport and renewable energy initiatives and the carbon tax. The whole point of having the carbon tax is that it is done in a way that nudges people and corporations to change their behaviour. It makes it more economical to buy an electric vehicle rather than a diesel car and to invest in a fuel pump, rather than using alternative heating systems.

The Deputy may wish to pretend to people that the Government can somehow come up with €50 billion, €60 billion or €70 billion to do all of it in the form of grants.

It cannot. That is not true. It is not honest. The Deputy is not being honest and is not really on the side of the environment. We cannot meet our obligations when it comes to climate change unless we have carbon tax, not as a solution, but it does need to be part of the solution. I saw it suggested yesterday that the carbon tax might increase fourfold in the next budget and that this is somehow on the table. I can say emphatically that it is not. There is no prospect of a carbon tax increase of that scale or anything remotely approaching it being proposed by the Government in the next budget. If there is an increase in the carbon tax - the budget has to be negotiated, as Deputies are aware - it is my strong view that the money should be ring-fenced and given back to people in the form of increases in the fuel allowance to protect those who are least well off, in the form of increased tax credits, and in the form of a dividend model. That is the model I prefer. I have no doubt that Sinn Féin will do what it always does, the populist thing, which is to peddle solutions that do not add up, oppose things that are unpopular, and still somehow pretend it is for the environment. We all know the far left is anti-environment.

Comment on this

Sadly, the evidence of this fee and dividend model that the Taoiseach is advocating, whereby people receive their money back on the carbon tax they pay, has been proven not to work. It has not worked in British Columbia in Canada, where emissions have not gone down. It has not worked in Norway and it will not work here. It will not work for the very simple reason that we cannot change people's behaviours in ways that they cannot afford. It may well be that the tax Fine Gael will negotiate with its coalition partners in Fianna Fáil may facilitate the better-off in society to improve the energy rating of their homes. They may even invest in an expensive electric car. I can tell the Taoiseach that for the broad mass of people, that is simply beyond their reach. Approaches that do work are investment in public infrastructure and investment in programmes that facilitate and support people to change their behaviour. What does work is straight-up investment in the green economy and green jobs. This make-believe scenario will not work.

I am glad to hear the Taoiseach is not going to increase the carbon tax fourfold, although he was quoted over the weekend as making precisely that promise.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

I was misquoted. I thank the Deputy.

Comment on this

By what quantum will the Taoiseach increase the tax? Will he be mindful of the fact that we have very high energy prices in the State already and that householders already contribute to helping our environment through the public service obligation, PSO, levy on every electricity bill? That nets €500 million per annum to support renewable energies. I dare say people outside this Chamber do not think they have seen much bang for those particular bucks in terms of protecting the environment.

Comment on this
Leo Varadkar The Taoiseach Fine Gael

I do not know where the Deputy gets her information but carbon emissions in British Columbia are down by 9% since they introduced their carbon charge regime. Carbon tax does not reduce emissions overnight. That is not the point. The point is that over time, it tips the balance in favour of investment in green technologies and heating systems and in electrical vehicles over those that are polluting. The Deputy sounds to me like one of the hard Brexiteers across the water. We know what she is against but we do not know what she is for. The stuff she is for is only the stuff that is popular. If she thinks we are going to meet our obligations to reduce carbon emissions, be able to take climate action, and respond to the demands of those young people who want us to get our act together on climate change by only doing things that are popular, by only doing investments and handing out grants, then I do not think even she believes her own rubbish.

Comment on this