FIVE YEARS after it was supposed to happen, a carbon tax and a climate change Bill may finally make it to the floor of the Dáil. John Gormley has received Cabinet approval to draft a climate change Bill that will set down principles in relation to greenhouse gas emissions and provide the mechanisms to deliver on them. Although the legislation will have to be cleared with Fianna Fáil, Taoiseach Brian Cowen is unlikely to persevere with the objections of his predecessor.
The Green Party is presenting the development as one that may rescue the fortunes of the party with the electorate. Certainly, it goes beyond a commitment in the programme for government to a carbon tax. And it is likely to feature significantly at a Green Party conference in the autumn that will vote on continued participation in Government. Imposing a statutory obligation on all Government departments to comply with climate change objectives would be a considerable advance.
The Economic and Social Research Institute (ESRI) has also issued a report on greenhouse gas emissions and the introduction of a carbon tax. It argues – as it did in 2002 – that revenues from a carbon tax should be used to offset income or labour taxes, aid competitiveness and subsidise the poorest section of society. Because recession has led to a fall in energy usage, it urged Government to lock in a series of reforms that could reduce business costs in the long term.
Of course, the same problems that arose in 2004 are likely to recur. Six years after the government signed up to greenhouse gas targets under the Kyoto Protocol, minister for finance Charlie McCreevy asked for submissions on the introduction of a carbon tax. At the time, because of our reliance on imported fossil fuels, we ranked fifth in the world as dirty-energy users. But industry and business threatened job losses and the government backed down. In its report, the ESRI urges the establishment of a climate change commission free from political interference. It warns that sectoral interests have consistently blocked worthwhile reform. It favours good value over specific technologies.
The window of opportunity in which the Government can correct past mistakes is narrow. Recession will probably allow us to meet our Kyoto targets for the period 2008 to 2012. But a resumption of economic growth – without early policy changes and the use of clean energy – will bring EU financial penalties by 2020. Apart from that, there are fundamental considerations regarding climate change and global warming.