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Carbon tax plan risks worst of both worlds: 'Too little to reduce emissions, enough to annoy people'

4 Oct 2019

Friends of the Earth sets out three failures and three tests on carbon tax

Friends of the Earth has warned that reported plans for a small increase carbon tax in Tuesday's Budget risk being ineffective or even counterproductive.

Commenting on media reporting that a planned increase in the carbon tax of between €5 and €7 euro a tonne, about a 2c increase in a litre of petrol, has been agreed between Fianna Fáil and Fine Gael, Friends of the Earth Director, Oisín Coghlan said:

"A carbon tax increase that amounts to 2 cent on a litre of petrol would be too little to change behaviour but enough to annoy people. "The key element for public acceptance of a increasing carbon tax is securing public trust that it will be done fairly and effectively, and the Government has so far failed to the leg work to achieve that".
Friends of the Earth highlighted 3 critical failures in the Government's approach so far, and set out 3 tests for the Budget on Tuesday

The three failures pointed out by the environmental justice organization are:

  • a failure to engage in meaningful dialogue with groups representing the interests of those vulnerable to the impact of the tax, such as the Society of St Vincent de Paul (SVP) and Irish Rural Link.

  • a failure to produce the review of energy poverty requested by all-party Oireachtas Committee on Climate Action in March.

  • the glaring contradiction between encouraging big business to import or explore for new gas while telling consumers they are going to be increasingly taxed for using fossil fuels.

Oisin Coghlan continued:

"It's very hard to champion a tax increase for consumers of fossil fuels while the Government continues to encourage producers of fossil fuels to import fracked gas from the US or explore for new gas in Irish waters. "It's like raising the tax on cigarettes while subsidizing Marlboro to build a factory here."
The three tests for the Minister on Budget Day are:

  • Will the Government ring-fence all the money from the Carbon tax (about €600 million) for Just Transition and Climate Action, not just the €100 to €150 million from Tuesday's increase?

  • Will the Government commit to meaningful dialogue with all stakeholders on how to ensure those vulnerable to the impact of the tax are protected and supported to reduce their dependence on fossil fuels.

  • How will Government ensure the public trust that there will in fact be an incremental increase every year and that the next Government won't just change course next year? Will the Government commit to underpinning carbon tax policy in legislation in the same way the corporation tax policy is underpinned in legislation?


Notes:

1) Last year Friends of the Earth called for the tax to be doubled to €40 a tonne with all the increase going straight back to taxpayers as "a cheque in the post" and all the existing revenue being ring-fenced for a Just Transition Fund. The Environmental Pillar has repeated that call this year.

2) The Stop Climate Chaos Coalition will publish detailed talking points on carbon tax in Budget 2020 on Monday.

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