Budget 2019 does not include an increase in the carbon tax from €20 to €30 as recommended by the Citizens’ Assembly, the ESRI and the Climate Change Advisory Council.
Chair of An Taisce's Climate Change Committee Phil Kearney said: “The increase in carbon tax was the only new climate policy measure under consideration. The fact that it’s now off the table is a disaster for an already-failing climate policy regime.
“Fossil fuels are still far too cheap. But without a carbon tax, their environmental and social costs are borne by everyone, whereas the profits go to the polluting firms.”
Sadhbh O’Neil of Friends of the Irish Environment added: "We need to start talking about reform of the tax system as a whole, with a view to realising both environmental and social justice. This means raising more, and higher, ecotaxes, but recycling revenues back into income tax reductions or reliefs for those householders that are particularly affected by rising energy and transport costs.
"It also means dramatically shifting investment priorities away from road transport to public transport, cycling, walking and shared mobility systems.”
Ireland's largest environmental coalition, the Environmental Pillar, has said it is "shocked" by the Government's decision not to increase carbon tax.
Elsewhere, CarsIreland.ie have welcomed the 1% surcharge for diesel vehicles across all VRT bands, saying it has "been a long time coming".
The Environmental Pillar has said it is "deeply concerned" as they said an increase in the tax is "vital to tackle out-of-control emissions, protect our health and environment, and bring in additional revenue".
It comes just a day after the UN report on Climate Change which says that it is possible to limit global warming to the 1.5C threshold, but only with deep emissions cuts from all countries.
Charles Stanley-Smith, budgetary spokesperson for the Environmental Pillar, said: “A carbon tax is a lever that we can pull immediately to support the State’s long-term targets such as the retrofitting of 45,000 homes by 2021 and getting 500,000 electric cars on Irish roads by 2030.
“Ireland is facing multi-million euro fines from Europe if we do not meet our binding climate targets so we can either have a carbon tax increase and reduce the amount of fines we are to pay or we can face higher fines that the average Joe will ultimately have to dig into his or her pocket to pay.
Oisin Coghlan, budgetary spokesperson for the Environmental Pillar, said: "The Government’s u-turn on the carbon tax is a giant two-fingers to younger generations who will face climate chaos unless we act to drastically cut pollution.
"A two-fingers to everyone under 35, a two fingers to the Paris Agreement and a two-fingers to the hundreds of millions of people already living with the devastating impacts of climate change in Africa, Asia and Latin America.
The Climate Change Advisory Council recommended that the carbon tax be raised to €30 per tonne in Budget 2019 as an “essential component” in achieving a low-carbon transition by mid-century.
The Environmental Pillar, however, feels that it needs to start at €70 in 2019 and rise by €5 a year to be effective, with half of the revenue going straight back to the people of Ireland in a carbon dividend shared to every adult.
They recommend that the rest should go to a Just Transition or Climate Action Fund 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 measures.
Meanwhile, CarsIreland.ie said: "As a country we are missing our carbon emissions targets by a significant margin and the government was always likely to take steps attempting to change behaviour.
"There has already been a dramatic shift away from diesel over the last few years and this will accelerate that further again."
They said they have seen a huge increase in the number of people searching for petrol, hybrid and fully electric cars recently.
Minister Donohoe also said today he is extending the VRT relief for hybrid vehicles until the end of 2019.
They said: "The positive from this is that it might further encourage people into zero-emission vehicles, which needs to happen if we are to meet our short and long-term carbon targets.