Dáil Éireann debate -
Thursday, 23 Oct 2003

Vol. 573 No. 2

Written Answers. - Greenhouse Gas Emissions.

Trevor Sargent

Question:

70 Mr. Sargent asked the Tánaiste and Minister for Enterprise, Trade and Employment the proposals her Department has made with regard to the proposed introduction of a carbon energy tax; and if her Department has carried out research with regard to the possible competitiveness implications from the introduction of such a tax. [24605/03]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney):

The proposed introduction of carbon tax is in response to our international obligations under the Kyoto Protocol to reduce emissions of greenhouse gases. The Minister for Finance signalled the introduction of a general carbon tax from the end of 2004, in his budget speech in December 2002. The Minister indicated that full consultation with interested parties on the design of the tax would be undertaken and also that there would be a reasonable lead-in time prior to introduction of such a tax. The Department of Finance published a consultation paper on proposals for a carbon energy tax in Ireland on 30 July 2003.

My Department has provided a submission as part of this consultation process and will continue to be fully involved in the development process. In its submission, my Department has made it clear that, in developing the tax framework, a crucial consideration must be the minimisation of any impact on competitiveness. To that end, my Department has argued that companies, which are participating in other greenhouse gas reduction measures such as emissions trading or legally binding negotiated agreements, should be exempted from the tax.

It is also critical that the level of tax must be balanced between the objectives of achieving appropriate realistic reductions in greenhouse gas emissions and realising these reductions at least cost, thereby maintaining competitiveness in the enterprise sector. In addition, it is essential that the definitive starting date and rates for the tax should be announced well in advance to facilitate proper planning by industry.

Forfás, in conjunction with my Department, had studies undertaken in 2002 to assess how best to achieve the reduction targets specified for the enterprise sector in a way that would minimise the effects on competitiveness. These studies focussed on taxation, negotiated agreements, emissions trading and investment in international greenhouse gas reduction projects. Industry representatives participated in the steering group for these studies. This work has been contributing to the development of policy for emission reductions in the enterprise sector and is a useful source of information in developing a framework for carbon taxation.

Question No. 71 answered with Question No. 34.