Key Green carbon tax demand not included

ENVIRONMENT:Carbon tax, a key demand of the Greens on entering Government, was not included in the Budget. However, Mr Cowen said a body to examine the introduction of the tax would be established shortly.

Mr Cowen had not been expected to bring in a full carbon tax regime but environmental groups had hoped a levy on fossil fuels would be introduced at a low level to allow businesses and householders to adjust, before being increased over time to meet the State's CO2 emissions targets by 2012.

The Tánaiste did refer to the carbon tax, saying that it would be introduced "in the lifetime of this Government". He also said he intended to establish the Commission on Taxation, which would examine the issue, "very shortly".

The Programme for Government also required Mr Cowen to give a "carbon report" in the Budget. This amounted to a restatement of the Government's Kyoto commitments - that carbon emissions will have to be reduced from 70 million tonnes a year to 63 million tonnes by 2012 - and an outline of the proportion of emissions generated by four main sectors: agriculture (28 per cent), transport (20 per cent), energy (22 per cent) and industry (17 per cent).

These figures are not new, but a detailed breakdown of Ireland's actual emissions for 2006 and detailed targets are to be included in the "carbon budget", which will be delivered today by the Minister for the Environment, John Gormley.

Mr Cowen's main concessions to the Greens were the changes to the VRT and motor tax regimes. However, he also amended the Business Expansion Scheme to allow easier access for recycling companies. Until now recycling companies must have already received grant assistance before they qualified for the Business Expansion Scheme. The Budget change now allows businesses to access the scheme if their proposals have been certified by an industrial development agency or county enterprise board.

Direct capital investment in water services has been given a boost of €45 million, bringing the total allocation for 2008 to €471 million. No additional projects were detailed by Mr Cowen. However, he outlined the projects already planned for 2008, including works at Ballymore Eustace, Limerick city, Donegal Bay, the Lower Liffey Valley, Portlaoise, Waterford, Dungarvan, Castlebar and Roscommon.

The Environment Protection Agency (EPA) will receive additional funding of €13 million, bringing its total allocation to €39 million for 2008. The extra money will go towards research and development, monitoring, staff and the construction cost of an extension to the EPA headquarters in Wexford.

Funding for National Parks and Wildlife is increasing by €8 million or 31 per cent, The Heritage Council is getting a 14 per cent increase and funding for building conservation is being increased by 27 per cent. The remediation of defunct landfill sites has been allocated an increase of €3 million, bringing its 2008 total budget to €13.5 million.

Mr Gormley described the Budget as the "greenest budget yet" but environmental groups and Opposition spokesmen said the Greens had not gained as much as they should.

Comhar, the Sustainable Development Council, welcomed the car tax changes but was disappointed by the lack of any carbon levy. Fine Gael environment spokesman Phil Hogan said the Budget was "staggeringly weak in terms of green initiatives". The Greens had done little but extract vague promises in relation to carbon tax, he said.