Taoiseach admits carbon taxes will rise, but not by €3,000 per household

Taoiseach admits carbon taxes will rise, but not by €3,000 per household

Taoiseach Leo Varadkar has said ESRI predictions that households will have to pay carbon taxes amounting to €3,000 in future years were "way off the mark", but that a regime to increase such levies was needed.

Mr Varadkar said he favoured a Canada-type model and agreed with suggestions by the Greens of gradual increases over several years possibly quadrupling carbon charges to €80 a tonne.

The debate comes after the Economic and Social Research Institute warned in a report that there needs to be a 15-fold increase in carbon taxes - up to €3,000 a home - by 2030 to help Ireland meet EU targets.

Such rises would hike up heating and fuel costs to encourage users to reduce emission outputs.

Speaking in the Dáil, Mr Varadkar said such projections were “way off on the mark”. The Government had yet to work out the increases, TDs were told.

The answer came after Fianna Fáil leader Micheál Martin quizzed Mr Varadkar about carbon tax rises after the Fine Gael leader on the weekend was able to promise up to €3bn in income tax cuts.

Green leader Eamon Ryan called for an immediate doubling of carbon taxes to €40 a tonne next year and a further €5 extra annually up until 2030. Money collected could be returned to people, he said, asking about more solar panels, heating changes and electric car charging points.

“We need to know what you are going to do,” declared Mr Ryan, calling on other party leaders in the Dáil to also outline their preferences for carbon taxation.

Mr Varadkar, who this week admitted Ireland would miss EU 2020 targets on climate change and now was looking to 2030, responded that he and the Greens were “joining forces” to agree on charges.

A “suite of measures” including targets and investments were needed, the Dáil heard.

Ireland needed to get it right after countries such as Australia had failed to properly introduce such a system, Mr Varadkar added. Furthermore, France was facing protests over such charges, he said.

Mr Varadkar also likened the levies to water charges, saying that they could not get it wrong like that.

He said, after speaking to Canadian prime minister Justin Trudeau last month, that he favoured gradual carbon tax increases rising possibly to €80 a tonne.

Revenue would go back to users through tax or welfare credits, he explained.

But other parties, including Fianna Fáil and Sinn Féin, were called on to set out their limits and for a cross-party agreement on future carbon taxes.

The rises, conceded Mr Varadkar, would see increased costs in fuel for the haulage industry and for agriculture but there would be a number of years for those impacted to adapt, the Dáil heard.

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