Ireland 'must impose carbon tax or face fine'

A CARBON tax must be imposed on motorists, householders and industry if Ireland is to avoid paying a €1bn fine for breaking our greenhouse gases limit, it emerged yesterday.

Greenhouse gases are one of the main causes of global warming and Ireland is producing double the amount it is legally allowed under the international regulation, the Kyoto Protocol.

If we do not cut these back to 13% a year we will have to pay another country that has complied with the regulations 1bn by the end of this decade, said An Taisce president Frank Corcoran.

Today the Government's economic and social think-tank will spell out how our greenhouse gases should be reduced at a conference in Dublin.

The Economic and Social Research Institute (ESRI) believes the Government should impose a 20c tax per tonne on carbon dioxide.

This would reduce our greenhouse emissions by two-thirds of what is necessary by 2010.

While Finance Minister Charlie McCreevy has said he will impose a carbon tax by the end of 2004, ESRI economist, John Fitzgerald believes it should be a tax of 20c a tonne.

The ESRI says the biggest reduction in greenhouse emissions would come from the electricity sector followed by the industrial sector.

But between a quarter and a third of all our greenhouse emissions come from agriculture particularly from rearing cattle. The ESRI believes the best way to reduce this is to cut the number of cattle as well as future forestry plans.

However, the reduction in greenhouses gases would be combined with a 4% increase in farm incomes, according to Kieran McQuinn of Teagasc.

The ESRI is also recommending that 23% of the revenue raised from the carbon tax should be used to compensate those on lower incomes through better welfare payments and tax breaks.