Mr. Derek Moran:

Going back as far as 2008 and 2009, we have taxed motor vehicles on the basis of carbon emissions. We introduced a carbon tax in 2010 and 2011. We saw progression in both of these areas until approximately 2012. The carbon tax increased from €15 initially to €20, but it has been flat ever since. With regard to motor vehicles, excise duty and so on, the rates increased but they have been unchanged since 2012. With regard to using fiscal instruments and taxation for the purpose in question, there has not been any change over time.

The speed at which the carbon price will rise over the next ten years will ultimately be a policy matter for the Government. There are examples of where governments have set out a trajectory for a carbon tax. In France, for example, there is to be a rise from approximately €30 to €85 over a period of five or six years. The fuel poverty implications for the French are quite different because it does not affect households as much. This is because 75% of French energy is derived from nuclear power. It is much less fossil-fuel intense. The reality is that if one increases the carbon tax, one generates revenue. By generating revenue, there is revenue to recycle to mitigate some parts of the problem. One cannot mitigate all parts but where there are fuel poverty issues one can address the points where the pressure is greatest, including through the winter fuel scheme, for example.

Some of the important work we have done is reflected in the report. I would recommend it. We worked jointly with the ESRI and we published the report in October. For the first time, for any given increase in carbon tax, we can calculate the likely impact on emissions. For a €20 impact, a doubling of the carbon tax, there would be a reduction in emissions of about 4.7% in emissions. That is very significant in light of the overall target of a 30% reduction over the next decade or so. The Climate Change Advisory Council talks about achieving a figure three times that. The likelihood is that it will not be linear. We are doing some work over the next 12 months as a priority considering the multi-annual impact and how it will be phased. Even if it is not linear, and if it is not a case of three times 4.7% but somewhere between 10% and 15%, it would be a very significant contribution to meeting the decarbonisation goals. I view those points as important. The work will inform how we map out the trajectory over the coming period. Mapping out a set of steps over the next ten years will be important. If if is not done, the chances are that if one picks off issues on an annual basis, with an annual budgetary cycle, one will not make a huge amount of progress.

On vehicle taxation, there are fairly fundamental changes happening over the next 12 months. The emissions measurement for new vehicles is changing. According to the EU Commission, if we move to the worldwide harmonised light vehicle test procedure, on which Mr. Kenny can provide detail, a much more realistic measurement of the actual emissions from vehicles would be given. One would see the emissions measurement going up by 20%, on average. That will result in a significant behavioural change. We already saw that with the changes we made in 2008.

It is a question of having a plan and marking it over time and of the recycling of revenue to the pressure points. The interesting piece concerning the work done with the ESRI concerns a 20% increase. Its overall impact on the economy was not that significant, it is fair to say.