Denis Naughten (Roscommon-Galway, Independent)
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95. To ask the Minister for Communications, Climate Action and Environment if he has commissioned a study on the effect of the current carbon taxes in reducing the use of fossil fuels; and if he will make a statement on the matter. [38839/20]

Eamon Ryan (Dublin Bay South, Green Party)
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The Programme for Government commits to increasing the carbon tax by the amount of €7.50 per tonne per annum to reach €100 per tonne by 2030, and to using a portion of the additional revenue generated to provide targeted social welfare increases and other initiatives to prevent fuel poverty amongst low-income families.Research commissioned by my Department and published by the ESRI in 2019 has analysed the effects of increasing carbon taxes on the use of fossil fuels. The report, "The economic and distributional impacts of an increased carbon tax with different revenue recycling schemes,” published on 8 October 2019, found that an incremental increase in the carbon tax reaching €80 per tonne in 2030, would help reduce economy-wide emissions by approximately 15% in 2030, compared to no increase in the carbon tax.

Building on this work, my Department commissioned further research in 2020 from the ESRI to examine the distributional benefits of utilising carbon tax receipts, including the impact of retrofitting on alleviating fuel poverty. As part of this programme of work, and on foot of a specific commitment in the Programme for Government, the ESRI published a report entitled, "Carbon taxes, poverty and compensation options," on 13 October 2020. The report identified a series of targeted direct social protection payment interventions that could be used to address the effects an increase in the price of fossil fuels would have on lower income households and examined the effect of each of these.In addition to raising the level of carbon tax by €7.50 per tonne, the Government committed, in Budget 2021, to significant increases in a targeted package of social protection supports. These supports were selected to address the impact of the increased carbon tax, as identified by the ESRI in the report referred to above. The specific measures are:

- an increase to the Qualified Child Payment of €2 per week for children under 12, and €5 per week for children over 12;

- an increase in the Living Alone Allowance of €5 per week; and

- an increase to the Fuel Allowance of €3.50 per week.

The total cost of these interventions is expected to reach an estimated €153.5m in 2021. This will be part-funded by receipts from the increased carbon tax of €48m, with the remaining €105.5m cost to be funded by general Exchequer receipts. The analysis suggests that households in the first five income deciles will see increases in their disposable income as a result of these measures.

Further information on these is measures is available on www.budget.gov.ie.