Shutterstock/Rustam Shigapov
rise at the pump

Carbon tax should quadruple to €80 per tonne by 2030, committee recommends

There was a row at Oireachtas Climate Action Committee over the plan to increase carbon tax.

CARBON TAX SHOULD increase to €80 per tonne by 2030, the Special Oireachtas Committee on Climate Action agreed today.

There were some dissenting voices to the recommendation being included in the report, with a lot of back and forth particularly between Fianna Fáil and Fine Gael on the issue. 

Yesterday, the committee rejected a Fianna Fáil amendment which sought to remove a fixed recommendation on the level of carbon tax people will pay in the years ahead.

Tax increase 

The committee’s report now contains a recommendation to government that carbon tax should increase to €80 per tonne by 2030. 

It states that the committee: 

…acknowledges that a carbon price trajectory to €80 per tonne by 2030 would play an important role in the State’s response to climate change.

It goes on to state that it is the committee’s view that the Minister for Finance should set out a carbon price trajectory that rises to €80 per tonne by 2030, and this should only be implemented when and evidential-based plan is in place to increase supports and incentives for climate action measures including the protection of those vulnerable to fuel poverty”. 

Fuel poverty 

It also sets out that before any such tax can be rolled out, the government must examine the impacts on low-income families and on those who “may not be in a position to immediately transition from fossil fuels, including the potential use of social protection mechanisms such as tax credits and welfare payments. 

The report states that a review should be completed by June 2019 into the extent of fuel poverty across all cohorts of society, and a public consultation should be launched into the carbon tax increase proposals. 

The results of the review and public consultation should form the basis of a draft policy paper, which will be submitted by the end of June 2019.

Row over the tax 

Yesterday, there was a row between Fine Gael and Fianna Fáil members over the plan to increase carbon tax, with a series of votes being held. 

Chair Hildegarde Naughten described it as “stumbling block”, with Fianna Fáil submitting an amendment to the committee’s report seeking to “acknowledge” a carbon tax increase rather than expressly supporting it or specifying the cost.

Fine Gael’s Marcella Corcoran Kennedy sought to have the trajectory cost of carbon tax included in the report and set out in legislation this year.

It is understood Fianna Fáil had serious concerns with the proposal to quadruple carbon tax over the next 11 years, with the issue being discussed at length at the party’s parliamentary party on Tuesday.

The government’s advisory body, the Climate Change Advisory Council, has strongly recommended Ireland incrementally increase the tax to €80 per tonne by 2030 in order to reduce the country’s rising carbon emissions.

The Fine Gael members accused Fianna Fáil’s Timmy Dooley of attempting to “water down” the report.

Providing certainty to people 

TD Martin Heydon said the cost trajectory gives people “certainty” about what they will have to pay, but was quick to add that it is not a revenue raising tax, and is merely being introduced to change people’s behaviours. 

He said if the specific carbon tax target was removed from the report, the headline would be that the climate change committee were not “brave enough” to take action, just a few weeks after thousands took to the streets calling for politicians to step up. 

Dooley said that he is in favour of a carbon tax and of the recommendations from the advisory committee, which placed the cost at €80 per tonne. 

However, he argued that people need certainty around the supports that will be offered in the way of a rebate, and to ensure this tax does not have a negative impact on their wallet. 

He said the text of the report does not make it clear what the tax will be spent on, or how the needs of people, who cannot afford the tax, will be supported. 

Dooley said he had particular concerns about the “least cost pathway” mention in relation to the roll out of the tax. 

Fianna Fáil’s Jack Chamber said that this could be used as a “licence for Leo” to introduce the tax as he sees fit. 

“I’ll not take a lecture from anyone in Fine Gael on climate change,” said Dooley, who hit out at Fine Gael for their “panic attack” over rolling out carbon tax.

Corcoran Kennedy said she welcomed Dooley’s comments that he accepts a carbon tax is necessary, but added that he “doesn’t want to put a price on it”.  

Dooley said that at all times he has been responsible in relation to climate change, adding that Fianna Fáil has always been interested in tackling climate change “long before it was fashionable”.

Last year, the Taoiseach committed to increasing the carbon tax in the Budget, but rolled back on the decision, increasing the VAT instead. There have been concerns within political circles about the increase in carbon tax as people speculate about a general election this year. 

Bríd Smith, who sits on the committee, said she was unhappy with “ordinary people” having to pay tax increases, and criticised the other members of the committee for not supporting proposals to roll out free public transport. 

Your Voice
Readers Comments
This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
Leave a Comment
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.

    Leave a commentcancel