Darren O'Rourke (Meath East, Sinn Fein)
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12. To ask the Minister for Communications, Climate Action and Environment his views on whether the quadrupling of the carbon tax over the next decade is going to disproportionately affect those who can least afford it and contribute to already high levels of fuel poverty; and if he will make a statement on the matter. [16251/20]

Darren O'Rourke (Meath East, Sinn Fein)
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I want to ask the Minister about the proposal to quadruple the carbon tax over the next ten years. Sinn Féin has pointed out consistently that without alternatives in place first, it is a punitive tax that will hit workers and families hard. It will associate positive climate change measures with a negative. Some 400,000 people are living in fuel poverty in this State. If they cannot afford to heat their homes now, they will not be in a position to pay a carbon tax.

Eamon Ryan (Dublin Bay South, Green Party)
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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.

Darren O'Rourke (Meath East, Sinn Fein)
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Sinn Féin agrees that we need to reduce our carbon emissions and meet our legally binding targets. It is on the approach to this that we differ from the Government, however. We believe climate action must be socially just and that we must protect people as we transition to a greener economy. It is not just Sinn Féin that disagrees on the approach being proposed by the Government. The Minister previously advocated a fee-and-dividend approach to carbon tax. At his party conference last year, he said the fee-and-dividend approach is progressive and benefits those on low incomes. He stated: "It is a clear immediate signal for everyone to reduce their carbon, but it doesn't hit people in the pocket." Has he completely abandoned that position? Will he outline the specific model of carbon tax that is being proposed?

Eamon Ryan (Dublin Bay South, Green Party)
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It is true that I was, and still am, an advocate of the fee-and-dividend model. At all times during the discussions of the joint Oireachtas committee at which we were focusing on how to protect people from fuel poverty, I said clearly that I would not rule out the hypothecation model if it could be designed and structured in a way that achieved the same objectives. I referred to the three-way split. Elements include the allocation of some €3 billion to increase social welfare provisions or other measures specifically to target people at risk of fuel poverty and investing particularly progressively in social housing and rental properties. The best way to address fuel poverty is to improve people’s homes. Another element is the allocation of €1.5 billion for an agricultural scheme, particularly aimed at small family farms. Census data or CSO data show this community is particularly left behind in the current economic system.

The measures being set out can address that social justice objective. As I have said throughout this process, that was the primary aim that we sought to achieve.

Darren O'Rourke (Meath East, Sinn Fein)
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I am not persuaded by that argument. In my experience as a public representative in Meath I have seen that there is a cohort of people who will not benefit from the measures that are being proposed, who will see these measures as regressive and who will be disproportionately affected by them. These people are vulnerable and the imposition of a carbon tax without alternatives, which they do not and will not have, will be very difficult. I am not the only one who says this approach is a regressive one and some people in the Minister's party say the same.

I want to ask about the proposed €9.5 billion that the programme for Government says will be raised from the carbon tax. That is a massive commitment to make but there is no detail on how much of this will be raised per year and from what sources. Can the Minister outline some details on that?

Eamon Ryan (Dublin Bay South, Green Party)
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Again, I do not have the figures to hand but I will happily ask the Department to follow up on it and to forward to the Deputy the background statistics, which came from the Department of Finance's projection forward as I recall. Strangely, one would hope that in time as a variety of different measures kick in, including the carbon tax, our use of fuels will decrease and the revenue numbers will fall from that sector.

It is clear that carbon tax is an element of this but it is not the only one. The key measures are some of the investment decisions, not just in the use of this €9.5 billion but other private and public sector investments will also have to be made. The retrofitting programme alone is a €30 billion project for the next ten to 15 years. It is beyond compare in terms of the scale of investments we need to make. In that context, the carbon tax will help but it is not the only policy measure, nor is it the critical policy measure to my mind. We will need every measure, such is the scale of change we are seeking to bring about.