Paudge Connolly (Cavan-Monaghan, Independent)
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Question 293: To ask the Minister for Finance if he proposes to introduce a carbon tax in the foreseeable future; and if he will make a statement on the matter. [19121/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Government decided in September 2004 not to introduce a carbon energy tax. A great deal of work went into examining how a carbon energy tax could be implemented and its likely effects in environmental, economic and social terms. In this respect the Government decided that a carbon tax was not an appropriate policy option and that, instead, it would intensify action on the non-tax measures under the national climate change strategy, for the following reasons.

First, the Government concluded that the environmental benefits of such a tax would not justify the difficulties that would arise, particularly for households, from the introduction of such a tax. In this respect, the carbon energy tax would have imposed price increases on many products already suffering sharp increases, partly as a result of recent increases in international oil prices.

Second, in considering the introduction of such a tax my Department carried out an extensive consultation process in which 117 written submissions were received. Over half of those who expressed a view on the carbon tax were against it including a number of significant representative bodies. Even some of those who had no difficulty with a carbon tax in principle sought exemptions for various sectors and purposes.