Dáil Éireann díospóireacht -
Tuesday, 18 Feb 2003

Vol. 561 No. 4

Written Answers. - Environmental Taxes.

Joe Costello

Ceist:

151 Mr. Costello asked the Tánaiste and Minister for Enterprise, Trade and Employment her Department's assessment of the implications for industry of the proposed carbon taxes; and if she will make a statement on the matter. [4431/03]

Gerard Murphy

Ceist:

197 Mr. Murphy asked the Tánaiste and Minister for Enterprise, Trade and Employment if her Department has undertaken a study to quantify the scale of job losses to industry as a result of the proposed decision to introduce carbon taxes. [4557/03]

Gerard Murphy

Ceist:

199 Mr. Murphy asked the Tánaiste and Minister for Enterprise, Trade and Employment the expected overall financial costs to industry of the combination of the proposed carbon tax and the large increases in energy costs to industry already signalled by the CER during 2004. [4753/03]

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

I propose to take Questions Nos. 151, 197 and 199 together.

While the introduction of a general carbon tax from the end of 2004 was signalled by the Minister for Finance in his budget speech last December, the tax framework has not yet been developed. The Minister made it clear that given the many implications of such a tax, both environmental and economic, there will be full consultation with interested parties on the design of the tax. This commitment to consultation is reiterated in the draft social partnership agreement, Sustaining Progress, which states that in keeping with Ireland's obligation under the Kyoto Protocol to reduce greenhouse gas emissions and the announcement in the budget regarding the development of a general carbon tax, there will be full consultation with the social partners having regard to the potential implications for jobs, competitiveness and social inclusion; I expect that the Minister for Finance will initiate consultations to develop a framework for the tax shortly.

My Department will be fully involved in the development process, where important issues with implications for industry are likely to include, the level at which the tax will be set, the question of exemptions or reductions for companies engaged in other greenhouse gas reduction measures such as emissions trading and negotiated agreements and the question of recycling the tax. In developing the tax framework, a crucial consideration will be minimisation of any impact on competitiveness.

The proposed introduction of carbon tax is in response to our international obligations under the Kyoto Protocol to reduce greenhouse gas emissions. Taxation is one of a number of measures included in the national climate change strategy, which sets out a framework of mechanisms to help Ireland to meet this international commitment. In regard to the Deputy's question on a study of the impact on industry of the introduction of carbon tax, Forfás, in conjunction with my Department, commissioned studies to asses how best to achieve the reduction targets specified for the enterprise sector in a way that would minimise the effects on competitiveness. These studies focused 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 will be useful source of information in developing a framework for carbon taxation.

In relation to the question of increases in energy costs to industry already signalled by the CER, the position is that the CER is responsible for electricity prices and comes within the remit of the Department of Communications, Marine and Natural Resources. However, I understand that the CER has not made any announcement regarding increases in electricity prices for 2004.