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Dáil
‹ Ceisteanna ar Reachtaíocht a Gealladh - Questions on Promised Legislation

Energy prices and carbon tax

Summary

Deputy Boyd Barrett argued that energy prices and data centres were driving bills up and suggested the Government use carbon tax differently. The Tánaiste said he could not commit on the budget, accepted data centres increase demand, and linked higher electricity use to wider electrification.

Contrary to what I believe the Tánaiste stated, data centres are contributing to the global surge in demand for energy and, consequently, the price hikes. Setting that issue aside, what is undoubtedly the case is that energy prices for ordinary people are going through the roof. Many have seen two, three or four energy price hikes this year alone. The Tánaiste stated that the Government could not do anything to control the hikes because they had to do with wholesale energy prices. The Government can do something about it, though, and I suggest it does, namely, through the carbon tax. We have always believed that the carbon tax was an unfair and regressive tax on people who have very little control over the amount of energy they use because of a lack of insulation in their homes and so on. In the context of surging energy prices, which will rifle people's pockets, the Government should defer any talk of adding to that burden by increasing carbon tax in the forthcoming budget. Will the Tánaiste commit to that?

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Leo Varadkar The Tánaiste Fine Gael

I will say to every Deputy in advance that I cannot make commitments today in respect of the budget. The budget will be announced by the Ministers, Deputies Michael McGrath and Donohoe, shortly.

Regarding data centres, the Deputy is right. Data centres and, more importantly, the retention of data - it has to be retained somewhere - are contributing to the increased demand for electricity in the world and will continue to do so as long as we decide to retain data. The same applies to electric vehicles, electric heat pumps and the electrification of industry. We are encouraging people to go electric. The solution is not to shut down industry, to tell people not to replace their oil heating systems or get electric vehicles or to cancel the electrification of railways. The solution is to produce more electricity, particularly from renewable sources.

The carbon tax is an important climate action measure. The majority of climate scientists, including many Nobel prize winners, are adamant that climate action cannot be achieved unless carbon taxes and carbon pricing are part of the solution. However, a proportion of those receipts will be ring-fenced to assist people in fuel poverty in particular.

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