Varadkar wants to give cash from hiked carbon tax to public rather than ring-fencing for energy projects
Taoiseach Leo Varadkar has said he favours returning the proceeds of a hiked carbon tax to the public over ring-fencing it for energy efficiency projects.
The Government was criticised by environmentalists for failing to increase carbon tax in the last Budget. Mr Varadkar said the Government didn't want it to be a "tax-increasing Budget" and decided to raise VAT for the hospitality sector rather than increase carbon tax.
A draft report from the Oireachtas Climate Action Committee proposes a fourfold increase in carbon tax to €80 per tonne.
Options for using increased carbon tax revenues include using it to fully compensate those likely to suffer from fuel poverty and using the balance for climate action funding, like retrofitting schools.
Another option would be to return the proceeds in a dividend to all households, similar to the 'carbon cheque' idea previously floated by the Taoiseach.
Mr Varadkar said that there could be a hybrid of both options and the Government intends to bring in further measures to alleviate fuel poverty.
But he said his preference is for the dividend.
"I would rather see the money going back to people and allow them to decide how they want to spend it.
"And they can spend it on improvements to their homes, they can spend it on the first down payment on an electric car or lots of things they can spend it on," he said.