Budget 2020: Climate ambition still lacking

Niall Sargent Press Releases

Immediate Release

Ireland’s largest environmental coalition has said it is disappointed that Budget 2020 has failed to show the level of urgency required to deal with the climate emergency we are facing,

While there were some positives (discussed below), the Environmental Pillar – which had called for a €20 bump in the carbon tax – said that it is concerned that the small increase in the tax announced today will be ineffective and could be counterproductive. [1]

The small increase will be both ineffective and counterproductive as the marginal increase in fuel price is too little to change behaviour and bring down emissions yet enough to raise concern among the wider public already suspicious of the tax.

In addition, the Government failed to move on other common sense environmental taxation that would protect our environment and health, tackle escalating emissions and bring in a chunk of funding for the just transition, namely a Throwaway Levy to target single-use items  and an Aggregates Levy to tackle emissions from the roaring construction industry.

While it is positive that revenue raised will be ring-fenced for Just Transition and Climate Action – including funding for peatland rehabilitation – the Government has failed to heed the warning of civil society groups, charities and the ESRI that at least some revenue needs to go back to the people of Ireland to protect low-income families. [2]

It is equally worrying that the Minister was not clear on any plans to ring-fence the existing €400 million brought in annually by the current €20 per tonne carbon tax rate that goes directly to the Government’s main treasury account.

The Pillar had recommended that the tax increases to €40 in 2020, with the additional €20 revenue going directly back to the people of Ireland through either increases in social welfare payments and direct payment to homes or through an increase in welfare payments and tax credits. [3]

The revenue from the existing €20 per tonne tax should be ring-fenced for a Just Transition 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 projects across the country.

The new nitrogen oxide charge on new and imported petrol and diesel cars is welcomed, as well as moves to encourage and improve e-vehicles infrastructure.

However, we would still like to have seen more focus on public transport and an increase in the price of diesel to match petrol and address air quality and health risks. [4]

Revenue generated from these measures -calls for which have fallen on deaf ears in previous budgets – could have been ring-fenced to help fund a Green New Deal for Ireland. [5]

Positives of Budget 2020

  • Just Transition support for the Midlands including the creation of a new energy efficiency scheme, more funding for peatland rehabilitation, and the move to appoint a Just Transition Commissioner to engage with communities in the midlands and to work closely with NESC on the issue
  • An emissions-based charge on nitrogen oxide emitted from passenger cars registering for the first time in the State from 1 January 2020
  • The doubling of our annual contribution to the Green Climate Fund to support emissions reductions in developing countries.
  • An increase of €2 in fuel allowance, amounting to near 10 per cent increase, and additional funding of €13m for the Better energy Warmer Homes Scheme to support those in fuel poverty

Karen Ciesielski, Coordinator of the Environmental Pillar, said:

“The carbon tax is a lever that we can pull immediately to support the State’s long-term climate targets such as country-wide retrofitting and redesigning our fossil-fuelled transport system. And, if designed correctly, it can be done without penalizing rural households or lower income families.

“A reformulated carbon tax that supports low-income households and helps fund the low carbon transition would be the ideal Robin Hood tax, bringing down emissions and also warding off impending multimillion euro fines for missing our binding climate targets.

“Budget 2020 was an opportunity to do so by ensuring that the increase in the tax was enough to encourage behavioural change and reduce emission, while at the same time ensuring that those on low-incomes and in fuel poverty are protected from increasing costs.

“However, the Government has clearly gone in a different and disappointing direction.”

Oisin Coghlan, convenor of the Environmental Pillar’s climate group, said:

“The carbon tax is not a silver bullet for our climate ills. It is essential but not sufficient. But it does incentivize every other investment decision towards cleaner, less polluting options.

“The key element for public acceptance of an increasing carbon tax is securing public trust that it will be done fairly and effectively, and the Government has so far failed to do the leg work to achieve this.

“Every year we delay laying out a vision for the future, the less we will be able to cope in a low-carbon society. Budget 2020 was a chance 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] Budget 2020 – Four common sense environmental levies https://conta.cc/30TCisL 

[2] Ibid  

[3] The ESRI has found that a targeted increase in tax credits, maximum rates of welfare payments and Child Benefit can achieve the same distributional result as a lump-sum ‘cheque in the post’, but with less administrative cost and complexity:  https://www.esri.ie/system/files/publications/BP202001.pdf

[4] Environmental Pillar. Proposals for the 2018 Budget: https://tinyurl.com/yxkbqxzq 

About the Environmental Pillar

The Environmental Pillar is a national social partner of national environmental organisations. It works to promote the protection and enhancement of the environment, together with the creation of a viable economy and a just society, without compromising the viability of the planet for current and future generations of all species and ecosystems.

Niall SargentBudget 2020: Climate ambition still lacking