Economy

Price will be paid for EU snub on carbon tax

No one wants to pay more tax but voters widely accept climate change is a real danger

Minister for Finance Paschal Donohue shakes hands with Seán O’Rourke before the “Today with Seán O’Rourke” programme on RTÉ Radio 1, on Wednesday. Photograph: Sam Boal/RollingNews.ie

Sat Oct 13 2018 - 06:00

Every minister for finance likes to have some measure, however small, that they can unveil on budget day without it having been endlessly leaked and analysed beforehand. Without it, there is precious little drama in the modern budget day.

Not this year. Paschal Donohoe determined that there would be no nasty surprises at all, nothing to discommode people. Everything was passed through not only the departmental policy wonks but a thorough public analysis ahead of the day.

The hoteliers knew their fate well in advance. The restaurateurs were gently disabused of their hopes of a reprieve before the big day. Even the “unexpected” exit tax on corporates will little more than sensible implementation of a widely-flagged measure that would have to come in next year anyway.

To many, it had all the air of a pre-election budget determined that no one should be offended, even if there was not enough good news to sway votes more positively.

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The mystery then is why the Minister backed away from carbon tax. Along with hotel VAT, it was among the most widely-flagged measures ahead of the speech. And in a post-emissions scandal world, there is widespread acceptance that diesel is no longer deserving of its "clean discount" at the pumps compared to petrol.

No one wants to pay more tax but, Danny Healy-Rae aside, there is widespread acceptance among voters that climate change is a real danger. Coping with the weather extremes it delivers is, they know, far more expensive than the few extra cent on the price of their fuel.

Now departed environment minister Denis Naughten admitted as recently as August that, far from moving towards binding EU targets for 2020, Ireland's CO2 levels were actually rising.

Quite how we intend to persuade our EU partners that we should not be heavily fined for the inevitable breach of those targets when we fail to take even the most basic and generally expected measures to mitigate climate change is a mystery. The suspicion is we will all pay a high price and in more than simple cash terms.

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