In Budget 2020 I announced that the revenues from the increase in the carbon tax from €20 to €26 per tonne CO2 would be ring fenced and the funds used to:
- Protect the most vulnerable in society;
- Just Transition; and
- Investing in low carbon transition
On 9 October 2019, the Department of Public Expenditure and Reform published "The carbon tax increase - what it will be spent on", which sets out specific details in relation to where the ringfenced monies will be going. This can be accessed at: https://assets.gov.ie/35942/a72c67a62786496686fa9257b3f6fa64.pdf
These are increases that would not have taken place in the absence of an increase to the carbon tax and the increased funding is additional to that provided by the National Development Plan. All funds are ring-fenced for these schemes only. Departments will not be allowed to use the carbon tax revenues for any other purpose, other than those schemes detailed below. This guarantees that all funds raised by the carbon tax will go towards climate action.
I am satisfied that this approach will enable the continued ringfencing of additional carbon tax revenues to just transition and climate mitigation areas in future years.