Tuesday 27 June 2017

Increasing carbon tax by €10 per tonne would net an extra €200m...with no catch

Natural gas is one of the fuels subject to the carbon tax Stock photo: PA Wire/Press Association Images
Natural gas is one of the fuels subject to the carbon tax Stock photo: PA Wire/Press Association Images

Brian Ó Gallachóir

Ireland introduced a carbon tax in 2010, which applies to certain fuels that we burn for heating (natural gas and heating oil) and for transport (petrol and diesel).

It generates significant revenue, about €400m per annum. Looking to Budget 2017, if the carbon tax rate was increased by €10 to €30 per tonne of carbon dioxide released, it would result in an additional €200m being made available to spend next year.

The Budget discussions currently centre on additional spending of €1bn, so an additional €200m would provide scope for significantly more demands to be met. It could be used, for example, to reduce income taxes or to invest in public services such as health or education, or in infrastructure such as rural broadband.

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