John Cregan (Limerick West, Fianna Fail)

The purpose of this Bill is twofold: to provide a permanent legislative basis for the motor tax increases approved by the Dáil by way of a financial resolution on budget day and to give statutory effect to the new carbon dioxide-based motor tax system for new and pre-owned imported cars registered on or after 1 July 2008.

Road transport generates approximately one fifth of the EU's CO2 emissions, with passenger cars responsible for approximately 12%. Although recent years have seen improvements in vehicle technology, particularly in fuel-efficiency which translates into lower CO2 emissions, this has not been sufficient to stem the growth in emissions due mainly to increased car ownership and increased car size. While the EU reduced overall emissions of greenhouse gases by almost 5% between 1990 and 2004, our CO2 emissions from road transport rose by 26%. This was despite a reduction of more than 12% in average new car CO2 emissions between 1995 and 2004.

The situation in Ireland is even more stark. While road transport accounts for a similar portion of total emissions, we have seen an increase in emissions from road transport by more than 180% between 1990 and 2006. This reflects growth from relatively low car ownership levels in 1990 and is a trend that seems set to continue.

In this context the Government has decided to move from a motor tax regime where the charge is based on the engine size, to one based on carbon emissions. This was first mooted by the Minister for Finance, Deputy Brian Cowen, when he introduced the budget before last. The then Minister for the Environment, Heritage and Local Government, would have commenced the consultative process. I commend the current Minister, Deputy John Gormley for continuing this initiative and for introducing this measure.

I have a problem with the legislation and I made a statement outside the House in this regard. I wish to be consistent and put my remarks on the record of the House. My difficulty is with the six-month lead-in period from January to July. As other speakers said, we are setting out to reward those who are responsible and who buy cars with lower emissions and to penalise those who want to be irresponsible and make the choice to drive the gas guzzlers. In taking this action, I see a serious anomaly being created in this legislation. In the period 1 January to 1 July, a car with lower emissions would attract a discount on VRT after 1 July and lower motor tax after 1 July. Buyers are being penalised because for the lifetime of such a car it will always be taxed as a high taxation car. A comparable car bought a month later will be far more attractive.

Statistics show that new car sales were up 3% in the month of January. I was a little taken aback because it was defeating the purpose of my argument but when I delved further I found that much of that increase was attributed to cars having been pre-booked in October and November by people who were probably not au fait with what was going to happen after July.

I am open to correction but I understand there is a substantial drop in car sales for the month of February. I am at a loss to understand why the motor trade is not saying something. I have been contacted by constituents who have chosen to cancel their new car orders and wait until after July. I wonder where this leaves the jobs in the motor trade.

I fully support the thrust of the Bill and the shift from engine size taxation to emissions taxation and this goes without saying. However, if this legislation is passed by the Oireachtas, I am at a loss to understand why we must wait until July.

I understand the Minister addressed some of these questions in his speech. He stated it would be unfair to penalise people for a purchasing decision made in the past. It is equally unfair to penalise a person who is doing the right thing and purchasing a car with lower emissions. I ask the Minister to examine this proposal with a view to lessening that penalty on the people who are making the right decision and doing the right thing.

We have made great strides in other aspects of reducing CO2 emissions but the most difficult challenge is in the area of transportation and CO2 emissions from cars. I greatly welcome the thrust of the Bill which will ensure we will make a big impact and live up to our responsibilities.

Climate change is profound in its implications for the planet and its inhabitants and represents a very significant challenge for society. It cuts to the core of modern living and commercial activity. The solution is clear. We must reduce human induced emission of greenhouse gases quickly if we are to avoid the worst impact of climate change. We all have a responsibility to play our part. While in global terms Ireland's emissions may be relatively small, it is essential that we apply the resourcefulness and initiative that has delivered very significant economic success in the past decade to the challenge of adapting to a low carbon society.

Along with our EU colleagues we have been to the forefront in bringing the Kyoto Protocol into force. Our efforts to secure global agreement and deep cuts in emissions must be backed up with a commensurate level of ambition at home. The programme for government and the carbon budget, which the Minister delivered in December, make it clear that we are up for that challenge. I commend the Minister. An earlier speaker referred to the role being played by the Ministers, Deputies Gormley and Ryan, as Green Party Ministers in the Government. I commend them in playing a very positive role in the Government in recent months. I work closely with the Minister, Deputy Ryan, through my chairmanship of the Oireachtas Joint Committee on Communications, Energy and Natural Resources. That relationship has been very positive and I am sure others have the same experience with the Minister, Deputy Gormley. I commend them because they have been criticised. They have been tough enough to take that criticism and continue with the job of work at hand and remain focused. They have both been involved in introducing important legislation into the House, which I am satisfied and proud to support.

The local government fund, which is very important, has been mentioned. The ring fencing of motor taxation for local government usage is also important. I welcome that it will continue. It is put to very good use. We depend on it for the maintenance and upgrading of our roads in all local authority areas. It is important that it is maintained at a high level. The highways being built throughout the country are the responsibility of the National Roads Authority and billions of euro are being spent on them. That is fine until a driver comes off those highways and motorways into rural areas of Limerick, Cork, Kerry or wherever. People who are paying decent money for their motor vehicles should be entitled to drive with a high level of safety and comfort. The low cost safety improvement works scheme was mentioned recently. It has specific funding allowing local authorities to identify problem areas and black spots, and have remedial work carried out. Such funding is also very important because local funding may not be adequate.

I welcome the Bill. I appeal to the Minister to carry out a final review with a view to trying to ensure that the maximum number of people, who are responsible and doing the right thing, and who are doing as we ask and buying cars with lower emissions, can get the benefit of this at the earliest possible date. I would have no difficulty if somebody missed out in the first six months and could not get the benefit. However, I have considerable difficulty when somebody doing the right thing will never be able to get the benefit during the lifetime of that car because the passport does not cover that.

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