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Carbon tax increase should be deferred due to surging fuel costs, ex-minister says

Erik G

NOW IS NOT the time to increase carbon tax in this years Budget, according to Mayo TD Michael Ring. 

The Fine Gael TD – a former minister for rural development – told his party members at a meeting last night that he had written to Finance Minister Paschal Donohoe and Climate Action Minister Eamon Ryan asking for no increases in the carbon tax this year due to the rising cost of heating for consumers.

Speaking to The Journal this afternoon, he said “we have to cut out the hypocrisy”, stating that “we are facing into a very uncertain winter” and now is not the time to increase costs for people.

“We have a problem, now is not the time to increase carbon tax on fuel,” he said, adding that there is a “serious problem” right now with the “price of fuel, electricity and everything else”. 

As part of the Programme for Government agreed by Fianna Fáil, Fine Gael and the Green Party, the coalition outlined a target of increasing carbon tax gradually up to €100 per tonne by 2030.

As part of that pledge, carbon tax increased by €7.50 from €26 per tonne to €33.50 per tonne in Budget 2021 and increased €6 per tonne in the previous budget.

Carbon tax is applied to petrol, diesel and home-heating fuels.

Finance Minister Paschal Donohoe has previously that the government “remains committed” to increasing carbon tax to €100 per tonne, adding that climate change will be “central” to the upcoming budget.

Ring said while the carbon increases are set out in legislation, the pandemic has shown that laws can be amended and changed when emergencies dictate.

He said the cost of petrol and diesel at the moment is “horrendous”. Carbon taxes hit rural areas disproportionately, he said, adding that in rural Ireland there is no public transport, and people are forced into their cars if they want to travel somewhere. 

“We are already paying enough for fuel,” he said.

Ring is not the only one calling on the government to defer increasing the carbon tax in this years Budget.

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People Before Profit’s Richard Boyd Barrett told Tánaiste Leo Varadkar today that the public have already seen two, three or four energy price hikes this year alone.

“The Government can do something about it, though, and I suggest it does, namely, through the carbon tax. We have always believed that the carbon tax was an unfair and regressive tax on people who have very little control over the amount of energy they use because of a lack of insulation in their homes and so on.

“In the context of surging energy prices, which will rifle people’s pockets, the Government should defer any talk of adding to that burden by increasing carbon tax in the forthcoming budget,” he said.

Varadkar said he could not make commitments in respect of the budget. 

He said the carbon tax is an important climate action measure.

“The majority of climate scientists, including many Nobel prize winners, are adamant that climate action cannot be achieved unless carbon taxes and carbon pricing are part of the solution. However, a proportion of those receipts will be ring-fenced to assist people in fuel poverty in particular,” he said.

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