Martin Ferris (Kerry North, Sinn Fein)

The context of this debate is the Copenhagen Summit which is taking place this week. Climate change and, more fundamentally, adverse weather conditions are among the issues of immediate concern in Ireland in the light of the impact of the recent floods and concerns we are witnessing different and unusual patterns of rainfall that reflect global changes. Different agendas will be pushed in Copenhagen - some for selfish national reasons - but, hopefully, the hopes of ordinary people will prevail. That is why it is vital that the summit reaches a legally binding deal, which is strong enough to tackle the challenge of climate change while being just and fair to developing countries.

Different interests are at stake. For developed countries, which by and large no longer depend greatly on manufacturing industry, many of targets set revolve around reducing emissions from heavy industry. For many developing countries, including some that have experienced significant industrial growth over recent decades, this is regarded as presenting a threat to their future development. Striking a balance between the two, which has the best interests of the world's population at its centre, will not be easy, but it must be done. There is also the onus on the developed western countries to set and implement binding effective targets for emission reductions, to develop new cleaner technologies in order that developing countries are not left to carry the main burden for the negative impact earlier western and northern hemisphere industrialisation and use of carbon fuels has had.

The problem of climate change must also be approached in a positive manner in order that moving away from older manufacturing systems based on the heavy use of carbon fuels is not seen as an inhibitor to economic growth but as an opportunity to boost the use of newer and cleaner technologies, which do not present the same threat to the environment and which are more sustainable both in terms of the environment and future economic growth. The key to this will be the greater utilisation of renewable energy, which will not only have radical implications for the industrial economy but also for agriculture, with the potential for the greatly increased production of energy crops, and for an entirely new economic sector based on the production of energy from the wind and sea. The potential for Ireland, as an island nation, is a huge benefit that must not be lost.

The Government claims that by introducing a carbon tax it will be on board with the thinking outlined internationally. If carbon tax is to work effectively, it should be revenue neutral whereas the measure introduced in the budget is another means to increase revenue and, in common with most of the other measures implemented, it falls disproportionately on people who are feeling the impact of the current austerity programme. It has been argued by experts in the field that an effective carbon tax, which would reduce the use of carbon fuels, would also reduce revenue from that source as logically as if it was a success, the use of carbon fuels in the transport sector would fall.

The Green Party may claim its introduction fulfils part of its commitment to having the Government implement measures to protect the environment and to attain the ambitious targets set for the reduction in CO2 emissions but there is little in it that will tackle the underlying causes. Instead, it will impose an added burden of taxation and will in no way help to change patterns of transport and overall fuel use. For example, nothing in the manner in which it will be implemented will encourage people to use public transport rather than their own cars. That has been pointed out by representatives of the bus sector who have made the valid point that if the Government was serious about encouraging a significant shift to the use of the bus sector, it would not have imposed this tax on buses.

The other issue is that the tax will increase the level of fuel poverty. Imposing the tax on users of home heating oil, coal and peat will mean an added cost to household budgets, which will mean that more people will be unable to keep their homes adequately heated. This, in turn, will lead to health problems which will lead to an increased burden on the health services.

The Minister for Finance claimed that the increase in fuel poverty will be offset by a voucher system that will facilitate the application of an allowance and also that more will be invested in the effort to make homes more energy efficient and, therefore, reduce the cost of heating homes. Surely that programme ought to have been made a greater priority before this and measures put into place to ensure all houses built over the past period were compliant rather than throwing it in now as an afterthought due to the fact that the Minister knows that applying the carbon tax to home heating oil will increase fuel poverty, as he has recognised.

He also claimed that revenue from the carbon tax will be partly used to support rural transport, which is disingenuous, given rural transport is under severe constraints from cutbacks to services. The moves afoot to significantly reduce the availability of buses in rural areas will offset any likely shift away from private car use if for no other reason than that even if people did wish to do, the service either will be no longer available or has been significantly reduced.

That is not to say there is not a serious issue to be addressed here. The level of emissions needs to be reduced. Under the Kyoto Protocol, this State has committed not to allow CO2 emissions rise more than 13% above their 1990 level. Currently it is 23% above the agreed target. Not merely does this leave us in breach of our international obligations, it renders us liable to annual fines of up to €180 million. This accelerates the necessity for us to live up to our obligations.

Kyoto marked only the first step in tackling global warming. Experts estimate that carbon dioxide emissions must be reduced by between 80% and 90% by 2050 if run-away climate change is to be avoided. We have not merely a moral obligation to future generations to prevent global warming; it makes economic sense. The Stern review found clear evidence that it is cheaper to take the necessary measures to prevent climate change now than to deal with the consequences later.

Climate change is not the only reason, however, to reduce our dependence on fossil fuels. World oil supplies are getting harder to access and are concentrated in a reduced number of geopolitically unstable nations. There is still lots of oil in the ground, but it is getting tougher to find and more expensive to extract. Meanwhile the growth of the Asian economies continues to increase global demand for energy. Estimates of the date of peak oil – the point at which global supplies will top out before entering decline – range from now until 2020 or later. However, there is a growing consensus that we are entering an era of permanently higher energy prices. As a country that imports 90% of its energy, situated at the very end of extended supply lines from the Middle East and Eastern Europe, Ireland is uniquely vulnerable. This is all the more reason we should now invest in clean, sustainable energy.

Dealing with the twin challenges of climate change and peak oil requires us to begin reducing our fossil fuel usage and developing alternative sources of energy. This can be achieved by putting a price on carbon emissions, which will drive up the price of fossil fuels to reflect their environmental costs while making renewable energy more competitive. However, this again is something that would discriminate against the most vulnerable in society.

An alternative to a carbon tax such as this might be a personal carbon trading system, whereby the Government would set a national carbon budget, limiting the amount of carbon which could be emitted in a given year, and use it as a basis to allocate emissions credits to individuals. Every adult would be entitled to the same number of emission credits, which would be held in electronic accounts and used to make carbon-related purchases such as electricity, heating fuel and petrol. People who wanted an extra carbon allowance would be able to engage in emissions trading and purchase additional credits. Conversely, people who did not use all their credits could sell their surplus. The balance of supply and demand would set the price. Unlike a carbon tax, personal carbon trading would set a definite limit to the amount of carbon released by the economy in a given year. Giving everyone an equal number of carbon credits would ensure equity and effectively address the issue of fuel poverty. Personal carbon trading would be a progressive measure and since the rich use more energy, they would need to buy allowances from the less well off. In this respect, personal carbon trading is superior to a carbon tax. However, it would be complex to implement and involve high administration costs.

Perhaps the best option would be a cap and share scheme, such as that proposed by the Foundation for the Economics of Sustainability, Feasta, and supported by Comhar, the Sustainable Development Council of Ireland. Under cap and share, carbon emissions would be capped at their current level and then reduced rapidly year by year. Each of us would receive an annual fossil fuel pollution authorisation permit, PAP, conveying the right to our individual share of that year's total emissions and making us responsible for it. The important thing about these permits is that unlike personal carbon trading, they would not restrain our personal energy use. Instead, they would permit fossil fuel production. PAPs would be valid for a year, during which people could sell them to financial intermediaries such as banks and post offices, which in turn would sell them on to oil, coal and gas importers or producers. These producers would need to acquire enough permits to cover the carbon dioxide emissions from every tonne of fossil fuel they sold.

Cap and share has a number of advantages. Unlike a carbon tax, the fact there is a cap on emissions means a reduction in the amount of carbon entering the atmosphere is guaranteed.

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