Experts and Opposition hit out at failure to hike carbon tax

THERE will be no increase in the cost of motoring and home heating fuels after the Government failed to hike the carbon tax.

Finance Minister Paschal Donohoe said he intended to increase the tax from €20 per tonne at present to a higher amount by 2030, but failed to introduce any changes for 2019.

The Climate Change Advisory Council, which advises the Government on climate policy, said it was disappointed in the U-turn, especially in light of a UN report this week which highlighted the planet was warming quicker than previously believed.

“After this week’s publication of the IPCC’s special report on global warming of 1.5C, which highlighted the absolute urgency to introduce measures that reduce emissions, this lack of action on increasing the carbon tax signals that the Government is not ready to take the obligations of tackling climate change seriously,” council chair Professor John FitzGerald said.

It had recommended an increase from €20 per tonne at present to €30, rising to €80 by 2030. Fianna Fáil also criticised the move, with climate action spokesman Timmy Dooley saying the Government was “all talk and no action”.

The move comes despite a report from the Economic and Social Research Institute (ESRI), published as part of Budget documentation, saying that while a doubling of the tax to €40 per tonne would result in a 7pc hike in diesel prices, consumers had faced “greater fluctuations” in fuel prices this year.

“Consumers are accustomed to relatively large fluctuations in fuel prices and may not react to increases in prices, assuming prices will fall again,” it said.

It added the poorest households would lose a higher share of their income than richer households, but doubling the tax would result in a 5pc cut in dangerous climate emissions.

The Government said 20pc of all Exchequer investment in the National Development Plan would help tackle climate change, and result in a “significant reduction” in emissions out to 2030.

It has announced a €103.5m forestry fund, and will introduce a Beef Environmental Efficiency Pilot (BEEP) to help improve the carbon efficiency of beef production.

It also unveiled a €70m fund to modernise agriculture, and additional funding of €70m for the environment and waste management programme.

A tax break for buying a hybrid vehicle is extended to the end of 2019, while buyers of new diesel cars will be hit with a 1pc surcharge. The 0pc benefit in kind for electric vehicles has also been extended for three years.

There is also an accelerated capital allowance for gas-propelled vehicles and refuelling equipment, which is aimed at hauliers and bus companies to move away from diesel and towards natural gas and biogas.

There is also funding for 28,000 home retrofits, with €164m allocated for energy efficiency.