Chambers Ireland calls for 'shadow' carbon tax

The introduction of a carbon tax should be investigated to encourage better energy use by all consumers, a business organisation said yesterday.

Launching its energy review paper, Chambers Ireland said a "shadow" carbon tax should be introduced to enable all energy consumers to understand the implications of such a charge.

However, Chambers Ireland chief executive John Dunne said while taxation was effective in modifying behaviour, the organisation was not confident that this or any government could be trusted to introduce a carbon tax on a revenue-neutral basis.

"The Government must develop and publish a model as a prelude to introducing a carbon tax, and only when convinced of its fiscal neutrality could Chambers Ireland accept this new taxation.

"By making it revenue-neutral, you've got the capacity to lower your overall tax bill by being efficient in the area that the tax is encouraging you to be efficient, and that is in energy. It has worked in waste collection and it has worked in water charging in other parts of the world."

Mr Dunne also called for greater support for energy initiatives that have received full planning permission but encounter ongoing opposition.

"The Government must ensure that exploration and production in Ireland remain attractive to companies. While this clearly applies to Shell, it is critical for a range of other initiatives, particularly in regard to wind, thermal treatment and other energy-related projects."

However, he said the case for nuclear-power generation in Ireland had not been proven, given the costs of commissioning a nuclear plant and the small size of the Irish energy market.

Among Chambers Ireland's recommendations to ensure greater competition and security of supply are the construction of an additional east-west energy interconnector between Ireland and Britain and the break-up of ESB power generation to facilitate a more competitive energy market.

"The dominant position of the ESB within the Irish market is in itself a barrier to increased competitiveness."

Chambers Ireland also said that developing a range of alternative energy solutions could also enabling Ireland to meet its international emissions obligations.

"Furthermore, we should extend the Business Expansion Scheme to include investment in these alternative energy sources and biofuels."