Carbon tax to be included in Budget 2019, says Taoiseach

Published by Niall Sargent on August 7, 2018August 7, 2018

August 7th, 2018

Budget 2019 will include an increase in carbon tax to help Ireland meet its obligations in tackling climate change, the Taoiseach said over the weekend.

Leo Varadkar said during his summer briefing in Government Buildings that we have to “grasp the nettle in pricing carbon” over the coming years.

He said that the State will look to compensate people living in poverty who will be the worst affected by increases in the cost of fossil fuels such as coal and peat briquettes.

The Taoiseach’s comments echo last month’s call from the Climate Change Advisory Council to increase the tax to €30 per tonne as an “essential component” in achieving a low-carbon transition by mid-century.

The CCAC is an independent body set up under the 2015 Climate Act to advise the government on climate change policy and assess Ireland’s transition to a low carbon economy by 2050.

“Unless you get the price of carbon right, you are going nowhere,” said the Council’s chair, Professor John FitzGerald, adding that the State should look to raise carbon tax to €80 per tonne by 2030.

Prof John Fitzgerald at CCAC Review launch Photo: Niall Sargent

Joseph Curtin, a climate economist who sits on the CCAC, said that a carbon tax is “a lever that we can pull immediately” to support longer-term targets outlined by the state such as the retrofitting of 45,000 homes by 2021 and getting 500,000 electric cars on Irish roads by 2030.

The latest CCAC report calls for the Government to work with EU states to bring in a regional carbon price floor in the electricity sector to guarantee that the price of carbon rises progressively over the coming decade. Any increase in taxation should not impact on poorer households, the report states.

In its review last year, the Council called on the State to accelerate the pace and scale of emissions reductions to have any chance of achieving its long-term objective of reducing emissions by at least 80 per cent by 2050.

Ireland needs to reduce carbon dioxide emissions by up to one million tonnes per year in order to meet targets set out in our National Policy Position. However, according to Prof Fitzgerald, we are currently increasing our emissions at a rate of 2 million tonnes per year.

The latest Environmental Protection Agency (EPA) data shows that Ireland’s emissions increased by 3.5 per cent in 2016, with significant growth observed in the transport, energy and agriculture sectors. Emissions projections up to 2035 illustrate that we are “completely off course” to address the challenge of climate change, Prof Fitzgerald said.

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