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Carbon Tax.

Dáil Éireann Debate, Thursday - 14 October 2004

Thursday, 14 October 2004

Questions (9)

Billy Timmins

Question:

9 Mr. Timmins asked the Minister for Finance his reasons for the decision on carbon taxes. [24626/04]

View answer

Oral answers (34 contributions)

The Government decision on carbon tax was made following a thorough examination of the issues involved, including how a carbon tax would be implemented and the associated environmental, economic and social impacts. In addition, my Department carried out an extensive consultation process in which 117 written submissions were received. Following this examination, the Government decided that a carbon tax was not an appropriate policy option and that, instead, it would intensify action on other measures under the national climate change strategy.

On a point of order, can the Minister refer to his answer under priority?

I am just about to do that.

He is repeating the answer. It might give us more time to ask supplementaries.

The Deputy is unbelievable.

That does not make any sense.

The Minister has much to live up to.

If Deputy Timmins tables a question, he is entitled to an answer. I was about to say that on the basis that this was a question with which we had already dealt, to give courtesy to the Deputy who tabled the question, I should mention the first two paragraphs and then refer to the question and answer session we had previously. The Deputy is not the only one who wants to make sure we make sense in this place.

I will not go over the ground that Deputy Boyle has explored already. When the Minister referred to the mitigating alternative policies, he said that one of these was to buy more on the emissions market. Does he accept the estimate that has been put out by independent experts that the cost of buying those on the open market by 2008 is about €1.4 billion? That is the equivalent of €1,100 per household. By 2012, it will have gone to €4.3 billion, which is almost €3,500 per household. Who will pay that? Where will that money come from? Is there a sting in the tail here in that perhaps the Minister will not announce a carbon tax now, but he will have to raise this tax later and that will result in distortions and effects from those impositions on households and on the economy?

The question asked for the reasons for the decision on carbon taxes, the answer to which I gave in a previous reply, which I do not want to repeat. Specific questions regarding the type of supplementary the Deputy asked should properly be directed to the Minister for the Environment, Heritage and Local Government who could give a detailed reply. All I can say based on——

No, these are issues of tax policy. The Minister will have to raise this revenue.

To answer that point — the problem is that when one is honest one also gets stopped — I explained in the previous reply that we will examine incentivising alternative energy uses, renewal energy and all that area from the fiscal point of view. The specific supplementary the Deputy asked regarding the cost of going to the market and being able to buy the equivalent of whatever — there is a term for this that does not readily come to mind — to make up the national requirements——

Credits.

Yes, credits. If a question on that matter was directed to the Minister for the Environment, Heritage and Local Government, he would give a detailed and accurate reply.

The Minister will have to raise the tax revenue. He is avoiding applying a tax now, but he will have to raise the tax revenue.

We have explained the position — perhaps I should give the reply on that side of the House. We have explained that there are competitiveness issues. We do not believe that applying a carbon tax would deal with the problem in a way that would not affect our competitiveness.

There is still a bill to be paid.

We feel there are other options. I gave a detailed reply on this earlier.

The tax bill will also distort and have competitive effects.

The reason we did not proceed with applying carbon taxes was given in the reply to the previous question. If there are specific questions on the alternatives, they should be directed to the Minister for the Environment, Heritage and Local Government for the purpose of getting information — the purpose of Question Time is to obtain detailed information and not to have an argument.

The Minister is responsible for tax matters.

(Interruptions).

I believe the Minister will like this question because it relates to his old haunts. Does he agree that now that the Russians have signed up to the Kyoto Protocol that the ball game on climate energy has changed? What has his Department done to come up to speed with the new situation?

I listened and was delighted to hear him say he was willing to take action against improper uses of resources and so on and that he was open to ideas. Has he any proposals to take on those gas guzzlers, the 4x4s that one sees in deepest Donnybrook? Other member states of the European Union have imposed differential rates of tax on cars or on vehicles like SUVs which grossly over-use energy resources in urban environments. With the Russians now having signed up to the Kyoto Protocol, does the Minister agree the ball game has changed? This country has no climate change strategy.

Given that the Government has clearly ruled out a carbon tax, what measures does the Minister propose this State will introduce to ensure we reach our obligations under the Kyoto Protocol? Has he plans for any accelerated efforts in regard to the development of alternative energy sources?

I referred to the details in my reply to Deputy Boyle's supplementary question on the alternative policy options and I will not repeat them.

Regarding the Kyoto Protocol, the fact that Russia——

It is not that long a list.

That is why the Deputy is in the Green Party and I am in Fianna Fáil.

There are three or four paragraphs.

(Interruptions).

When his party gets 75 or 80 Deputies, we will all listen to the Deputy.

Come the day.

Come the man, come the hour.

Regarding the question of Kyoto commitments, the fact the Russian Federation is prepared to sign up to the Kyoto Protocol is an important step on its part. With its level of natural resources, including afforestation etc., and its ability to do what is required to be in compliance with that measure, we can all aspire in a far more realistic way to what is outlined in the protocol. We are fully committed to the Kyoto Protocol and the international response to combat climate change. Ireland will meet its greenhouse gas emissions reduction target under the protocol and has decided to intensify action on the non-tax measures under the national climate change strategy.

Regarding an earlier question, to which Deputy Richard Bruton also referred——

What about the 4x4s and the gas guzzlers?

These are matters for consideration in the context of the budget.

Has the Minister an open mind on that?

My mind is far more open than the Deputy gives me credit for.

Written Answers follow Adjournment Debate.

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