Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

The programme for Government underlines that carbon tax has an important role to play in addressing behaviours with negative externalities, in this case greenhouse gas emissions. It, therefore, commits to increasing carbon tax to €100 per tonne by 2030, through annual increases of €7.50 per annum to 2029 and €6.50 in 2030.

The clear view of the joint Oireachtas committee was that the introduction of a carbon tax would have to be based on measures to prevent fuel poverty. It is in that context that the programme for Government contains a commitment to commission further research from the ESRI, to be published by October 2020, on how best to protect those affected.

The programme for Government also commits to hypothecating all additional carbon tax revenue into a climate fund, raising an estimated €9.5 billion over the next ten years. This fund will be utilised to ensure that the increases in the carbon tax are progressive by spending €3 billion on targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition. The fund will provide €5 billion to part-fund a socially progressive national retrofitting programme targeting all homes, but concentrating first on social housing and rental properties in which people are at risk of fuel poverty. Finally, we are committing to allocate €1.5 billion to a REPS-2-style programme to encourage and incentivise farmers to farm in a greener and more sustainable way. This funding will be additional to funding from the Common Agriculture Policy and it will include incentives to plant native forests and to enhance and support biodiversity on family farms.

A significant volume of research has been undertaken in recent years, by the ESRI and others, into the distributional impacts of carbon tax. This research has helped to inform decisions taken in the context of budget 2020 to ring-fence a portion of the additional revenues from increasing the tax to €26 per tonne. I refer to measures to address fuel poverty, including increases in the winter fuel allowance as well as additional funding for the warmer homes scheme. Investing in energy efficiency and low-cost renewable energy comprise the best way of eliminating fuel poverty.

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