Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I thank the ESRI. I apologise for not being here at the beginning. We are discussing many of the same issues with regard to the Finance Bill as we speak. Quite a few of us are double jobbing this evening. I read the witnesses' paper.

I wanted to ask about the carbon tax and the commitment that people seem to have to it. Perhaps there is a failure to distinguish between different types of carbon taxes. I am in favour of carbon taxes on people who are profiting from polluting the environment with carbon dioxide. I do not accept that it changes behaviour if financial penalties are imposed on people for using fossil fuels where they have no choice. There has to be a distinction. If the witnesses suggested taxing the profits of the aviation sector and companies such as Ryanair, or Larry Goodman and the big beef processors, I would say to load it on. If the tax is going to be applied to the small farmer or the family living in social housing, it is a different matter. For example, if the council will not insulate a family's home for the next decade and they have to increase the heat. People who are well-paid do not have to because their homes are well-insulated or they can afford to make up the difference between grants and the cost of retrofitting, while a family in private rented accommodation or social housing would not be allowed to do it even if they could get the money. Those people will not change their behaviour because they cannot. They are prohibited at every level from changing their behaviour and they are being punished in a situation where they are doing nothing wrong. That is the misapplication of carbon taxes. We have to speak out strongly about it.

If we do not challenge that type of carbon tax, there is a danger that we will make the least well off, the most vulnerable and the people who are least guilty of carbon pollution, hostile to the climate action agenda. There is no doubt in any study, globally, domestically, or anywhere else, that the rich emit far more carbon than the poor. This will punish the least guilty.

They will be made hostile to it and pushed into the hands of climate sceptics. I therefore appeal to the economists in the ESRI to distinguish between carbon taxes that punish people who are not in a position to change their behaviour because of price signals and those who essentially make money from polluting, carbon-heavy industry.

The witnesses say some of the inflationary pressures we see at the moment are specific to Covid, with people saving money and then starting to spend it again because things reopen, if I understand correctly, and are specific to slowdowns in particular sectors in which demand fell off during Covid. Are there any lessons to be learnt about our vulnerability to these kinds of inflationary pressures from Covid? To me, the lesson that has to be learnt from it, particularly when looking at energy but also in any other area, is that the more you plan and the less you depend on the swings and roundabouts of markets responding in particular ways to particular situations, the more you are able to cope with these kinds of situations. I ask the witnesses for their opinion on that. You are more vulnerable to these swings or moments of inflationary surge if there are areas which are completely dependent on private market actors to determine supply at critical moments, particularly when that supply is of things that are critical to the sustaining of the economy.

I have one last question. I want to give the witnesses time to come back in. Dr. McQuinn said we need to ramp up capital investment in a whole range of areas - and I agree with him - such as housing, retrofit, public transport, forestry, to mention another thing that has come up a lot this week, and many other areas. I would add third level education because if we do not have the skilled, trained workforce to do a lot of the things we need done, apprenticeships and so on, that will create bottlenecks and inflation. Dr. McQuinn says, however, that if we are to do that, we have to be careful about current spending. Could he identify where we should cut back on current spending? I worry about that. It sounds a little like austerity. Should we not at least point to the other possibility rather than cut back? Often even the distinction between current and capital is lost on me a little in certain areas. With increased investment in education, where does capital and current begin and end? I am not quite sure. We need more teachers and more school buildings. Maybe the witnesses could comment on that. It seems to me that there is an alternative, which is to look at the distribution of income and wealth in our society and tax policies that will give us more revenue by redistributing wealth and profits, which we have seen grow very significantly over the Covid period but which tend to be concentrated among small groups at the top of business and the top of our society.