Tommy Broughan (Dublin North East, Labour)
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Question 114: To ask the Minister for the Environment, Heritage and Local Government the projected estimated cost to the Exchequer per annum for carbon credits if the cost was to rise to €50 per tonne of CO2; and if he will make a statement on the matter. [16469/06]

Dick Roche (Wicklow, Fianna Fail)
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As part of an overall response to meeting Ireland's greenhouse gas emissions reduction target for the purposes of the Kyoto Protocol, the Government has stated its intention to purchase carbon allowances over the Protocol commitment period 2008-2012. The ultimate cost to the Exchequer will depend on the final purchasing requirement and the price of carbon when the allowances are actually purchased. The Government has stated its intention to purchase up to a maximum of 3.607m allowances per annum over the 2008-2012 period, but its objective is to reduce this purchasing requirement through the achievement of emissions reductions in the economy.

Since trading commenced in carbon allowances, the price has been volatile, rising at one stage to around €30 but falling again to below €14 by the end of last week. Purchases on behalf of the Government will be made by the National Treasury Management Agency which will apply its expertise in evaluating market trends and forecasts.

In the context of updating national projections of greenhouse gases in the 2008-2012 period, independent consultants ICF Consulting with Byrne Ó Cléirigh have assessed the average price of carbon during the period to be €15 per allowance. At the assessed price of €15, the maximum purchasing requirement would cost €54.1m per annum over the five year period. The equivalent figure, at a hypothetical price of €50, is €180.35m. In each case, these figures would be reduced to the extent that further emission reductions can be achieved.