Mr. Tony Goodwin:

It is important to point out that our criticism of Professor Morgenroth's report is in respect of his account of the diesel rebate scheme, an issue that directly affects the Irish road haulage industry. The report referred to 140 fiscal measures that would have an environmental impact. Our concern relates to two pages of the report that deal with the diesel rebate scheme. It is important, therefore, to ensure no one misunderstands our position as one of criticism of the general tenor of the report. Our criticism is of the account the report gives of the diesel rebate scheme only. Professor Morgenroth's conclusion on the diesel rebate scheme is that, somehow, giving the scheme to Irish haulage operators resulted in them driving more and using more diesel. That is a fundamentally misconceived notion. Haulage operators drive the minimum required distance needed to deliver and collect goods. Common sense would suggest that is the case. A large part of dealing with a haulage operation is to ensure fuel efficiency at all times, because burning fuel is a cost.

Professor Morgenroth explained in the report how he came to his conclusion on this matter. He stated he applied a price elasticity factor taken from the National Roads Authority to suggest that an increase in the cost of diesel would change behaviour and that hauliers would switch to another type of fuel. Those two factors do not apply to an Irish road haulage operator for the simple reason that the haulier will not drive any more or any less and he will not be able to switch his truck to another fuel type because it does not exist or is not a viable option.

Therefore price elasticity does not apply. It does apply absolutely to-----