Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Deputies for their contributions. It is important to put in context the impact that carbon taxation is having on changes in energy prices that I know are having an impact on the living standards of many commuters and families at the moment. In January of this year, the price of a litre of petrol stood at €1.31. According to AA Ireland, for the month of October the price for a litre of petrol stood at €1.65. That is an increase of 33 cent across the year which, for a tank of petrol or diesel, is having a large effect on the commuting costs many are facing at the moment. However, if one looks at the change across the period from January to October, carbon taxation accounted for 2 cent of that change. Those who appreciate and understand these things as well as I do will say that carbon tax is only one of the taxes levied on petrol and diesel, but if one looks at the movement on the price of a litre of petrol between January and October, 76% of it was due to changes that were not tax-related. While many are facing increases in the cost of energy and fuel at the moment, the majority of the reasons for that are not related to carbon tax. They are driven by the fact that the price of energy globally is going up for many reasons. While I accept that here in Ireland the change we are making in carbon taxation is adding to the cost of energy for many, and commuters felt those increases from budget night onwards, it is a small share of the increase in total cost that many are facing at the moment. If somebody was going to make the argument that carbon taxation is the reason we are seeing an increase in the price of a tank of diesel or petrol, I would reply that it is a contributory factor but it is the smallest of the factors at the moment. There are many other forces at play that are driving the inflation of the cost here and elsewhere.

Deputy Doherty talked about the effect that an increase in carbon pricing can have on the most vulnerable. I understand that, but that is why it is important to read into the record of the committee all of the things that the Government is doing from a budgetary point of view to help support those who might be most affected by such a change. There has been an increase of €2 per week in the qualified child payment for a child under the age of 12 and €3 per week for a child over the age of 12. There has been an increase of €3 per week in the living alone allowance. There has been a €5 increase per week in the fuel allowance. There has also been an increase of €10 per week to the income threshold of the working family payment. The cumulative effect of those increases is that those who have the least are protected the most from the changes we have made in carbon taxation. The ESRI and others would state that carbon taxation has the ability, in the absence of measures that can offer compensation, to be a regressive tax because it is based on how much carbon people use with no regard to their income.

That is why the Government has come forward with a package of measures that are cofunded by the increase in carbon tax to protect those who could be impacted most by a rise in energy pricing and the cost of fuel to which the carbon tax is only a contributory factor but not the cause.

Deputy Doherty said we should not move forward with a measure like this unless options are available to more who face the rising cost of commuting. This is the reason, for example, the Government is involved in the roll-out of the ConnectIreland programme, which tries to expand the bus network available to towns and villages across the country. It is why the Minister for Transport, Deputy Ryan, and the Government have sought to make additional funding available to CIÉ to support the availability of bus services around the country and to put routes in place, through ConnectIreland, that will provide public transport options, particularly for those in our rural towns and villages who do not have the kind of public transport options that they want to have.

Deputy Boyd Barrett's asked what I would say to the older constituent who contacted him. I get those calls myself. I would tell that person that we are making funding available to local authorities to accelerate their retrofitting programmes for local authority housing. That programme is working. I can see it in my own constituency. I can see the homes that are owned and run by Dublin City Council gradually being upgraded. That is happening. Those in the most need of upgrading should be prioritised. I would tell that person that I will do all I can to try to ensure that the local authority prioritises those most affected by having poor energy efficiency in their homes. For those who do not live in local authority housing, we are supporting Sustainable Energy Ireland, SEI, with grant programmes. As the Deputy is aware, at other points there has been a higher demand for grants than there has been money available to SEI to make grants available. That is why as we move into next year and beyond, we are making more money available to fund those grant programmes. At the moment the cost of retrofitting is prohibitively expensive for many. The Deputy will tell me that because it is expensive at the moment, we should not go ahead with these types of changes, or I think he might make that argument to me. I will not put words in his mouth. The Deputy spoke about the older person who contacted him, and I am also contacted, but he will also be aware of all the contact we have from teenagers, children and younger adults who are convinced, and they are right to be convinced, that they will not have the environment and ecology that the Deputy and I grew up with and enjoyed. They are scared about what that will mean for their lives and for their children. They are right to be worried because our environment and world is changing. I do not believe it is honest to argue that we can deal with that scale of change, try to mitigate it and reduce the harm that is coming without saying that we will not put up the price of the ingredient that is the cause of that change. That is what carbon tax is. The vast majority of scientists and economists who are advising governments and policymakers about what to do to deal with this say that carbon taxation is not all the answer but a vital and necessary component. That is one reason this type of change, which is probably the most difficult move in carbon taxing we have made in the last three years, is still on balance the right thing to do. I appreciate all the arguments that the cost of electric vehicles or retrofitting homes is too high. However, we know that where there is consumer demand for technologies the price will fall over time. Take technologies that have become commonplace in our homes, such as televisions or phones. The price of technologies that were prohibitively expensive not too long ago have fallen as demand increased and as the private sector, enabled by governments, responds to that demand. I accept that electric vehicles and hybrids are too expensive for many but they are falling in price and they are cheaper than they were some years ago. There are more vehicles available which have that technology.

That is part of the answer to Deputy Durkan's point. He asked how to make those technologies more readily affordable to more people. There are two ways. The first is that the Government does more to bring the cost down through grants and low-cost loans. We already do good work on that through SEI, for example. The second is that over time the cost of those technologies should fall.

This section is contentious and will be opposed by many on Committee and Report Stages. I appreciate the difficulty that an increase in carbon taxing creates for many now. However, it is a low share of the total reasons for the increases in energy prices. Some 76% of the cost increase in petrol and 71% in diesel is not related to what has happened in tax. Global forces are at play. If we accept that the climate crisis is a crisis that can threaten our civilisation, which are big words to use but I believe that is the prospect we face, then moves such as carbon taxation, as tough as they are, is the right thing to do.