Richard Bruton
Question:109. Deputy Richard Bruton asked the Minister for Finance his views on whether tax policy can play a more active role in incentivising climate action; and if he will make a statement on the matter. [43048/23]
View answerThursday, 5 October 2023
Questions (109)
Written answers
Ireland has committed to a 51 per cent reduction of 2018 Greenhouse Gas (GHG) emissions levels by 2030 and to carbon neutrality by 2050. The Climate Action and Low Carbon Development (Amendment) Act 2021 is the legally binding framework with clear targets and commitments set in law to ensure we achieve our national, EU and international climate obligations in the near and long term. Additionally, the sectoral emissions ceilings (SEC) agreed by Government in July 2022, further cements the emissions targets for each sector as we work towards halving emissions by 2030.
The policy challenge lies in addressing climate change and improving the environmental sustainability of our economic progress while Europe emerges from an energy and cost of living crisis. This involves striking a balance of policy measures which, inter alia, incentivise uptake of cleaner fuels and technology whilst protecting the vulnerable in society.
Taxation, operating in conjunction with other measures, provides the Government with an important climate action policy lever. Fiscal measures such as price signalling and the gradual removal of fossil fuel subsidies support the move away from heavily pollutant fossil fuels and towards more sustainable modes of transport, heat and production. A range of policies, including demand management, is needed to meet the necessary reductions and to underpin the transition to a low emission and ultimately net-zero economy.
The Commission on Taxation and Welfare (COTW), who were tasked with examining how the taxation system can be used to help Ireland meet climate change commitments, set out a number of recommendations on the role of taxation in encouraging carbon emissions reduction. This includes implementing the scheduled increases in Carbon Tax, reducing fossil fuel subsidies and developing new taxes to replace the revenues from fossil fuel taxes. The recent COTW report will inform the future consideration of energy and environmental taxation.