TERRA.WIRE
Ireland abandons carbon tax plan, but vows to meet Kyoto targets
 DUBLIN (AFP) Sep 10, 2004
 Ireland has abandoned plans for a carbon energy tax as part of its strategy to cut gas emissions that cause global warming, Finance Minister Charlie McCreevy said on Friday.

Instead, the government will pursue non-tax measures to reduce carbon dioxide emissions in line with targets set by the Kyoto Protocol to combat climate change, McGreevy said.

"The government has concluded that a carbon tax is not an appropriate policy option," following consultations with the wider public, McCreevy said.

The tax would have faced strong consumer resistance. Business and transport lobby groups had been seeking exemptions.

Ireland has a strategy to cut carbon dioxide emissions by about nine million tonnes a year. The carbon tax, which was to have been part of the strategy, would have cut as much as 500,000 tonnes a year.

The government will instead offer such measures as "energy efficiency initiatives and also the purchase of additional carbon emission allowances on the international market," McCreevy said.

The tax would have meant higher prices for electricity, coal, peat, heating oil, petrol, diesel and natural gas.

The rationale behind the tax was to change the relative price of fuels based on carbon emissions to encourage people to move to cleaner alternatives.

McCreevy said the tax would have involved a range of compensation, recycling and tax abatement measures but despite that "it would be likely to have some adverse economic and social effects".

The carbon tax would have been an additional charge on products that are already heavily taxed and already suffering "sharp increases".

"We concluded that the environmental benefits would not justify the difficulties that would arise, particularly for households, from the introduction of such a tax.

"Furthermore we cannot ignore developments in the international oil market. The recent price increases reflect the ongoing supply and demand situation in the oil market.

"In this situation, the resultant increase in the real price of energy products will, in any event, give an enhanced incentive to energy conservation," McCreevy said.

The Kyoto Protocol requires industrialized countries to trim their emissions of carbon dioxide (CO2) and five other greenhouse gases back to levels 5.2 percent lower than what they were in 1990, by between 2008 and 2012.

The 15 EU nations agreed overall to an eight-percent cut in emissions.