Budget 2018: Naughten welcomes review of carbon tax options

Environmental groups disappointed at lack of move to equalise cost of diesel and petrol

“We expected to at least see some moves toward disincentivising diesel use given the growing body of evidence on the damaging impact of its use on our climate and health.” Photograph: Dara Mac Dónaill

Environment and Science Editor The budget will begin a process of transforming the Irish economy to address climate change, according to the Minister for Climate Action Denis Naughten.

Responding to strong criticism from environmental groups, who claimed the budget had delivered “a drop in the bucket on energy efficiency; a few baubles on electric vehicles and a review of the carbon tax”, Mr Naughten said measures on transport, energy efficiency and air quality would make Ireland “climate resilient”.

While meeting Ireland’s 2020 targets on reducing carbon emissions were “very, very challenging”, the Government was in the process of negotiating 2030 targets with a view to meeting them at the very least.

He welcomed the review of carbon tax options announced by Minister for Finance Paschal Donohoe, who has asked Department of Finance officials and the ESRI to look at a carbon tax to drive changes in behaviour in households and businesses – to be introduced in the 2019 budget.


Mr Donohoe announced a series of measures that will impact on the energy sector and usage of renewable energy sources against a backdrop of climate change. These include supports for the leasing of agricultural land for solar panels: €36 million for expansion of energy-efficiency programmes across the public, commercial and residential sectors, and €7 million to fund rollout of a “renewable heat incentive”.

Mr Naughten insisted issues about climate and diesel emissions had not been ignored. There were measures to support a shift from “dirty vehicles to cleaner vehicles”, a move to introduce a carbon tax to achieve a modal shift in behaviour on emissions and steps to introduce a realistic price for carbon.

The EPA is to receive €17 million to expand its role in monitoring air quality; noise pollution and the climate challenge. Mr Naughten said he would act on evidence supplied by the EPA on air quality and on conclusions emerging from Ireland’s National Clean Air Strategy.

Damaging impact

The Environmental Pillar (EP) – a coalition of 26 environment organisations – expressed “extreme disappointment” at exclusion of measures to equalise the cost of diesel and petrol in Ireland, and an absence of moves to phase out the sale of petrol and diesel cars.

"We expected to at least see some moves toward disincentivising diesel use given the growing body of evidence on the damaging impact of its use on our climate and health," EP spokesman Niall Sargent said.

He said diesel fuel exhaust was one of the leading emitters of automotive greenhouse gases and particulates, with the World Health Organisation “clear that diesel exhaust fumes can cause cancer and emit 10 times more health-damaging pollutants than petrol cars”.

Friends of the Earth director Oisín Coghlan said Mr Naughten had repeatedly noted air pollution was estimated to cause four deaths per day in this country, and diesel fuel was a key contributor to that pollution.

“There is nothing in the budget which reflects this urgency to remove the beneficial treatment diesel fuel enjoys in our country,” he added.

While there was an extra €38 million for energy-savings schemes, on top of the €130 million the Sustainable Energy Authority of Ireland delivered in 2016, “this is a drop in the bucket compared to what is needed. The State’s own figures indicate we need to invest €2 billion every year from now to 2030 in making homes warmer and less polluting.

“We need a million electric cars on the road by 2030 to replace petrol and especially diesel cars. But only if we stop burning peat and coal for electricity, and again there was nothing on that in this budget.”

Big mistake

On renewable heat supports, “the Government’s big mistake is the exclusion of community-scale projects from the proposed support scheme”, sais Mr Coghlan.

The big criticism of the recently-published national mitigation plan was that it was “all consultations and reviews and no new decisions or actions”, he said. “We were told to wait for the budget to see new measures. Now the big reveal is a review of the carbon tax.”

He added: “If policy reviews and consultations reduced emissions Ireland would be a world leader in climate action. Instead we are one of only five EU countries that are going to miss out 2020 targets, and this budget does nothing to change that.”

The Government has allocated an additional €114 million to Irish Water due to the abolishment of water charges. The provision is made in the Department of Housing budget but was signalled by the Minister for Housing Eoghan Murphy a number of weeks ago.

The budget documents commit to a new funding model for the utility later this year as part of the revised estimated programme. The abolishing of domestic water charges proed a significant loss of funds for Irish Water.

The Government will also have to allocate additional monies in the capital plan for individual projects.

Kevin O'Sullivan

Kevin O'Sullivan

Kevin O'Sullivan is Environment and Science Editor and former editor of The Irish Times