Joan Burton (Dublin West, Labour)
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Question 61: To ask the Minister for Finance the status and details of proposals on the introduction of a carbon tax or a carbon levy in view of the recent increases in the price of petrol and diesel; if he proposes to proceed with the introduction of such a tax or levy; if so, when; and if he will make a statement on the matter. [28295/08]

Joan Burton (Dublin West, Labour)
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Question 62: To ask the Minister for Finance his proposals to amend the tax code to encourage good environmental behaviour and to discourage environmentally damaging practices; and if he will make a statement on the matter. [28296/08]

Joan Burton (Dublin West, Labour)
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Question 63: To ask the Minister for Finance if he will provide assurances that any carbon tax or carbon levy will be phased in on a revenue neutral basis over the lifetime of the Government. [28297/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 61 to 63, inclusive, together.

I accept that the tax system can, as well as other measures, be used to either encourage or deter certain behaviours that have impacts on the environment. In this regard the Government has been to the fore in using the tax system to promote environmental policies; examples include:

Budget 2008 provided for VRT on passenger cars being based on CO2 emissions, rather than engine size, with effect from 1 July 2008, to encourage the purchase of lower emission cars.

Motor Tax for new cars is also being based on CO2 emissions with effect from 1 July 2008.

Up to €2,500 VRT relief is available on the registration of series production hybrid electric and flexible fuel vehicles from 1 July 2008 (this replaces the previous 50% VRT relief for such vehicles).

Series production electric passenger cars and motorcycles have been exempted from VRT since 1 January 2008 for a three year period.

Capital allowances and leasing expenses for business cars are based on CO2 emissions from 1 July 2008.

An accelerated capital allowance initiative scheme for energy efficient equipment has been introduced which will allow companies to claim the full cost, in the year of purchase, of specified energy efficient equipment against their taxable income.

The Finance Act 2008 also provided for the VAT rate applicable on the supply of miscanthus rhizomes, seeds, bulbs, roots and similar goods used for the agricultural production of bio-fuels being reduced from 21% to 13.5%.

An excise relief scheme for biofuels over 5 years from 2006 has been introduced.

Recycling companies that meet certain conditions are included in the BES and Seed Capital Schemes from 2007 onwards; windfarms are already covered by the schemes under the manufacturing category.

The introduction of other tax measures aimed at encouraging environmentally friendly behaviour will continue to be considered in the context of the Budgetary process.

In relation to the introduction of a carbon tax/levy, the Programme for Government includes a commitment to introduce a carbon tax/levy over the lifetime of the Government. This will, of course, form an important part of the normal deliberative process of the Government in setting fiscal and environmental policy. The Programme for Government indicates that the phasing-in of a carbon levy will be on a revenue neutral basis.

As the Deputy will be aware, the carbon tax issue is being examined by the Commission on Taxation. The Commission is due to report by September 2009, at the latest.