Mr. Oisín Coghlan:

I wish it was my predecessor but I was around at the time. In this case, the law of unintended consequences is relevant. It was introduced because of the climate impact of carbon emissions from all fossil fuels for motor vehicles and it had a very positive impact in terms of behavioural change, in that consumers considered the carbon emissions per kilometre when choosing new cars, even though the price difference was not huge. It operated a bit like the plastic bag tax. When consumers were faced with VRT bands, they chose to go for the lower one. The car tax changes had a really positive educational effect. The day after the changes were introduced, in the face of some initial hesitancy on the part of the Society of the Irish Motor Industry, SIMI, that body produced and sponsored a brochure in the Irish Independentshowing all new cars listed by their VRT band. It would have cost the Government a lot of money to run that sort of education campaign. The change had a very positive impact but we underestimated the local air quality impact of increased diesel use. At the time it was hoped that diesel technology would improve faster than it actually has done in terms of pollution. It has also transpired that motor manufacturers have been less than honest with the public and with regulators about the pollution caused by their cars.

It is a cautionary tale but the lesson is not that we should not move forward with regulations that improve consumer choice and reduce pollution. The lesson is to make sure that we look at all of the possible consequences, as in the example of agriculture as referred to by Deputy Calleary. It is fair to interrogate but the next iteration of motor tax and VRT reform being planned by the Government should take this into account, while not losing the gains that we have had in terms of reduced CO₂emissions.