Budget 2019: Concern over possible State row back on carbon tax and diesel levy

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Immediate Release
Ireland’s largest environmental coalition is deeply concerned by reports that the Government is set to row back on hikes in carbon and diesel taxes.
It was widely reported in the media this morning that both the proposed increase in the diesel levy and carbon tax are proving to be sticking points ahead of tomorrow’s Budget.
The Environmental Pillar is deeply concerned by these reports as these two measures are vital to tackle out of control emissions, protect our health and environment, and bring in additional revenue.
This news comes on the same day as the launch of a landmark Intergovernmental Panel on Climate Change’s (IPCC) special report on emissions.
The report states that it is possible to limit global warming to the 1.5 °C threshold but only with deep emissions cuts from all countries.
If the Government decides to weaken its resolve on both carbon and diesel now, it will send a very weak message to the world and the people of Ireland about its commitment to tackle out of control emissions.
Carbon Tax
Last month, the Taoiseach said that Budget 2019 will include an increase in the carbon tax to help Ireland meet its obligations in tackling climate change. [1]
The Climate Change Advisory Council recommends that the carbon tax be raised to €30 per tonne in Budget 2019 as an “essential component” in achieving a low-carbon transition by mid-century. [2]
We feel, however, that it needs to start at €70 in 2019 and rise by €5 a year to be effective, with half of the revenue going straight back to the people of Ireland in a carbon dividend shared to every adult.
The other half should go to a Just Transition or Climate Action Fund to ensure that workers and communities are protected during the move away from peat and coal, as well as funding retrofitting and other energy saving measures.
Diesel Tax
While we wait for the Government to take steps to promote lasting policy on public transport, cycling and walking infrastructure, a tax hike may help stave off some of the health risks from diesel emissions.
Diesel is currently charged at 11c less per litre than petrol and Ireland has one of the highest percentage sales of diesel cars in Europe.
We have already been told by the OECD that this preferential tax rate has “little economic, social or environmental rationale”, while the European Commission has warned us to even out this “environmentally unjustified” gap. [3] [4]
Last July, the Department of Finance’s tax strategy group itself found that dieselisation is a “growing issue” that, if left unaddressed, will “result in negative environmental and health outcomes”. [5]
More recently, the Economic and Social Research Institute found that increasing the excise duty on diesel to the level of petrol could bring in €500 million a year and also reduce dangerous emissions. [6]
Charles Stanley-Smith, budgetary spokesperson for the Environmental Pillar, said:
“A carbon tax is a lever that we can pull immediately to support the State’s long-term targets such as the retrofitting of 45,000 homes by 2021 and getting 500,000 electric cars on Irish roads by 2030.
“Ireland is facing multi-million euro fines from Europe if we do not meet our binding climate targets so we can either have a carbon tax and reduce the amount of fines we are to pay or we can face higher fines that the average Joe will ultimately have to dig into his or her pocket to pay.
Oisin Coghlan, budgetary spokesperson for the Environmental Pillar, said:
“Alongside carbon emissions, diesel vehicles emit nitrogen oxides and particulates. We know that particulates are significant carcinogens, and many lives are lost every year because of them.
“In the past five years science has also linked these particles to Alzheimer’sslower brain development in children and heightened risk of diabetes and preterm births.
“Last year, we expected to at least see some moves toward disincentivising diesel use given the growing body of evidence on the damaging impact of its use on our climate and health.
“In the end, there was nothing in the budget to reflect the urgency to remove the beneficial treatment diesel fuel enjoys in our country.
“Budget 2019 needs to do something to try and change that, not just for our planet but for the health of the Irish people here and now.”
ENDS
[1] The Green News, 2018. Carbon tax to be included in Budget 2019, says Taoiseach: https://goo.gl/kytS8T
[2] Climate Change Advisory Council Annual Report 2018: https://goo.gl/i11JtK
[3] European Commission, 2017. European Semester: Country Report – Ireland: https://goo.gl/VSaqTZ
[4]Organisation for Economic Co-operation and Development, 2018. Economic Surveys Ireland:https://goo.gl/7KPWcN
[5] Tax Strategy Group, 2017. Energy and Environmental Taxes: https://goo.gl/mDRcX3
[6] Economic and Social Research Institute, 2018. The Environmental Impact of Fiscal Instruments:https://www.esri.ie/pubs/BKMNEXT351.pdf
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