ESRI: Government must align tax with welfare

The Economic and Social Research Institute says revenue gained from carbon taxation must be used to help older and poorer people to be more energy efficient.

The ESRI says the elderly, less well-off and rural dwellers will be the big losers when the tax comes into effect next January, as they tend to use coal and turf which will carry the heaviest levies.

The tax is being introduced under the terms of the Kyoto agreement.

Economist, John Fitzgerald, said: "The carbon tax will put up the cost of fuel for everybody.

"The poor are going to be worst affected by it, so you’re going to have to spend some of the revenue on increasing welfare payments and insulating the homes of elderly people.

"It doesn’t sound nice to have to pay more, but it’s what the Government does with the revenue that’s important."