Carbon tax is no cash grab, says Donohoe
Petrol, diesel, home-heating oil and gas to rise but some say climate measures don’t go far enough
FINANCE Minister Paschal Donohoe has denied claims that the increase in carbon tax represents a ‘cash grab’ to fund increases in public spending.
The Government’s first green Budget took immediate effect with a €6 rise in carbon tax applying from midnight to petrol and diesel, adding about €1 to a 50-litre tank fill.
Mr Donohoe has also signalled there is a “good chance” the €6 increase in carbon tax announced in the Budget would be repeated in every budget between now and 2030.
The staggered introduction of the tax over the coming 12 months means it will generate around €90m compared to €130m if levied in full.
There are already competing demands on that pot, one-third of which is earmarked for “just transition” measures to support workers in the midlands facing the loss of their jobs in peat related industries.
THOSE listening to the debate on climate change – whether it’s watching powerful teenager Greta Thunberg admonishing G20 leaders, sighing at protesting environmental activists clogging up the streets this week, or just separating out your waste before bin collection day – we all agree everything just got a lot more serious in Budget 2020.
Ireland ranks poorly in meeting emissions targets, pays more fines because of our lack of action and still favours motorists over cyclists and pedestrians, while our emphasis on beef farming makes us one of the worse polluters in Europe.
So both carrots and sticks were in Paschal Donohoe’s armoury as he announced a raft of new measures that will affect every single family in the country.
The well advertised increase in carbon tax by €6 per tonne is difficult to equate to ordinary family finances, but make no mistake, everyone will be paying more.
It translates to at least 2c on diesel and petrol prices, or over €1 per tank fill. In fact, it already has, since the price rise came in at midnight.
It’s another 16c on a bale of briquettes, 72c on a bag of coal, and home-heating fuel of all kinds will be more expensive. If you’re a natural gas customer, expect to pay an extra €14 or so a year – and that’s if the gas suppliers don’t jump on the bandwagon with their own charges.
Ongoing uncertainty in oil markets in the Middle East is expected to add to household pressures.
Kerosene users will see a €15 increase and it means electricity prices will rise across the board too, but probably not until next May.
Naturally, while families will feel the heat, it didn’t go far enough for some. The Green Party had called for an extra €20 per tonne tax, while a minimum of €15 extra per tonne was recommended by the Climate Change Advisory Committee, but Paschal has an election to win next year.
There’s an obligation to charge €80 a tonne by 2030, and at €26 we’re still barely a third of the way there.
It’s not all bad news. The estimated €90m being collected in carbon taxes, we’re assured, is being ring-fenced toward green investments which will see more cycle paths, greenways and e-car incentives.
Those in fuel poverty will see some alleviation against the measures, with a €2 increase in the newly named energy allowance, bringing it to €24.50 a week.
However, if you’re availing of sterling’s woes to import a car, or even buy new this year, a nitrogen oxide emissions tax will replace the sledgehammer 1pc levy on diesel motors. It’s seen as fairer and will apply to all private cars registering in the State from January 1.
It will also provide a disincentive to hang on to old gas guzzlers belching out smelly emissions.
If you’re lucky enough to have a job where a car is provided for you, the benefit-in-kind exemption on electric vehicles is being extended to 2022. This is generous and encourages electric cars, but doesn’t extend to the more popular hybrids which will continue to get the VRT reliefs already in place.
There’ll be a doubling of on-street charge points during the year, while communal charge points in apartment complexes will get a new scheme to aid installation by property managers.
Funding for home retrofits came under the spotlight recently – and not in a good way – after the grants budget was pulled, leaving many eco-conscious homeowners stranded, until the minister personally intervened in
the row. The €13m added to the Warmer Homes scheme, which is also run by the SEAI and provides free energy efficiency upgrades to households in energy poverty, will provide a small fillip to restore some honour.
The popularity of cycling will be encouraged by an additional €9m investment in greenways and cycle paths, particularly in urban areas.
Today’s taxpayers may not be happy with all the changes, but their children will.
Cycling will have €9m cash