Mr. Oisín Coghlan:

I will come to the question of cars shortly. I know that Deputy Lahart is probing us appropriately and testing our case. With regard to the view that we want to tax everything, I believe that is a simplification. People talk of environmental tax reform, as it is often referred to, but it can be a tax shift. These happen to be consumption taxes, but even when carbon tax was introduced, VAT was reduced at the same time and not much was made of that. One regressive indirect tax went up or was created and another tax went down. In the first year those two taxes more or less balanced off. This can be done in a revenue neutral way if desired. That is easier for national taxes than for consumption levies, but it is not necessarily about taxing everything. It is about shifting tax onto environmental pollutants, in the case of carbon tax, and reducing USC or PAYE. All the economic arguments show that this is more economically efficient for the country as a whole and the impact on economic activity is much less if carbon is taxed rather than taxing labour. Growth is helped in the shift of tax from labour to carbon.

For the past two to three years we have attended, as a pillar, the national economic dialogue in Dublin Castle in July. Towards the end the chairman pointed out that every single attendee who came to the meeting spoke about increased spending and he asked if anyone had any revenue ideas. We said that we did. We are some of the few people who come to the table with suggestions for how the State can raise more taxes. That is not necessarily always the most popular thing, but after an era of Ireland having to close a gap between our taxes and our State revenue and when the European Commission and the OECD have pointed out the need for Ireland to broaden its tax base and not become reliant, as we did before the bust, on a very narrow set of income streams, and although some of them are small fry in comparison with stamp duty in the mid 2000s, these kinds of taxes are worth seeing in this broader picture.

Reference was made to cars. On the issue of Volkswagen, while it pulled the wool over our eyes on emissions, there is no doubt that from a carbon sense diesel is less polluting than petrol. That was not a fraud. The Volkswagen fraud related to how much particular pollution it was putting into the local atmosphere. It was outrageous that this happened but it did not undermine the case for diesel being lass climate polluting.

I had not seen comprehensive evidence between hybrids and diesels. I believe it is one of these things that gets thrown about to muddy the waters. It is my understanding that, overall, the hybrid car will give a better environmental performance than a diesel car. The Deputy asked a very interesting question about where the electricity comes from and if it matters. The answer is that it does matter. In Ireland, about 27% of electricity comes from renewable sources. The ESB gave me some figures recently - I cannot remember them precisely - showing the performance of an electric car in Ireland being already substantially better than the performance of a fossil fuel car in respect of carbon emissions. Of the electricity fuelling such a car, one quarter is from renewable energy and three quarters of the power for that car comes from fossil fuels. It still gives a much better performance overall in pollution per kilometre for an electric car than a diesel or petrol fuelled car.