Taoiseach not only one facing fuel reform problems

LEO Varadkar isn’t the only one struggling to implement carbon tax reform – it has led to turmoil in France and it is a major battle for his friend, Canadian prime minister Justin Trudeau.

This year, Mr Trudeau’s government will begin rolling out measures that will track carbon emissions from major industries and introduce a minimum tax in provinces that don’t introduce their own levies.

A tax on fuel will follow on April 1, but the government wants the revenue raised from businesses to reward citizens.

Like the Taoiseach, Mr Trudeau is keen to protect citizens from the financial impact of the tax, and has promised that the money Canadians pay via carbon taxes will eventually return to them as rebates, or tax refunds. Forbes reports that in some cases, Canadians will receive more in rebates than they will pay in taxes. While the average household in Ontario will forfeit CAD$244 (€160), they may get up to CAD$300 (€197) in return taxes.

This presents a problem, as some observers have noted, because while it helps Mr Trudeau to sell the tax hike to his citizens, it does little to incentivise them to choose greener alternatives.

Mr Trudeau will be boosted by significant support for the measures from Canadian industries, but like Mr Varadkar, he is struggling to find the right balance.

Meanwhile, a carbon tax-based rise in fuel prices in France has led to ‘yellow vest’ riots in Paris that have threatened to destabilise the government.

The Taoiseach said last month that the crisis in France shows the difficulty of a simple carbon levy on the price of fuel.