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This week, the Climate Change Advisory Council, of which I am the chair, published its annual report. In this document, the Council expresses its serious concern that Irish greenhouse gas emissions are increasing, not falling, so that the state is not backing away from the fight against climate change.
The most important step we can take is to ensure carbon becomes more expensive, to reflect its damage to the environment, and strongly encourages individuals, households and businesses to change their behavior . Increasing the carbon tax would discourage us from using fossil fuels, which generate so much greenhouse gases. More importantly, it would send a signal to households and businesses that it will pay to invest in systems and technologies that minimize or eliminate carbon emissions. Unless the cost of polluting behavior strikes people in their pockets, other measures to combat climate change will prove ineffective to address the scale of our challenge.
An increased carbon tax would provide revenue to the government, which could fund compensate low-income households for the impact of rising fuel prices and fund other measures to reduce harmful emissions. Using part of the revenue from carbon taxes to reduce taxes on labor would also create jobs. The Climate Change Council recommends that the next budget increase the carbon tax from € 20 per tonne of carbon dioxide to at least € 30 per tonne. That would add about € 1 to a sack of coal and about € 0.25 to a bundle of briquettes, as well as an increase in the price of oil and gas.
Political Consensus
While most politicians support climate change, must be a strong political consensus around specific steps that can make a difference. Given Dáil's arithmetic, rising carbon taxes will require all major political parties to be involved.
Switching fossil fuels to electricity to heat and transport energy will be crucial to combat climate change. However, the European emission trading scheme (ETS), which affects electricity production costs, is failing and should not be reformed before 2030. The European system of emission allowance trading (ETS), Emissions trading should have been expensive enough to shut down coal and peat. stations across the EU. However, the issuance of permits was far too generous. As a result, the price of pollution has been very low and coal-fired power plants will continue to be profitable across the EU for the next decade.
The production of clean electricity is essential to help stop climate change
Another strategy would be for the Republic and the main European partners to impose an appropriate variable tax on the carbon used in the electricity sector, by raising the minimum price of carbon. Significant research conducted within the UCC show that if a coalition of countries from northwestern Europe (France, the Netherlands, United Kingdom, Ireland and Scandinavia) introduced such a tax it would ensure the closure of coal production in the participating countries. in a substantial reduction of carbon emissions. The higher wholesale price of electricity would also make renewable electricity more profitable by saving on subsidies. It is interesting to note that setting a minimum price for carbon would add less to households' electricity bills than the current "utility" subsidy for renewables and peat.
Minimum price
The United Kingdom already has the price of carbon for electricity production and the Dutch government is currently implementing such a policy. The French government is also very interested in this policy
The alternative approach, already announced by the government, is to take regulatory measures to shut down coal production – a welcome development. Even if this would reduce Irish emissions by around 7 per cent, this would also improve the profitability of gas generators. Unlike a tax-based price hike, it would not generate revenue, so it is a second-best policy
The Republic should instead join a group of European countries from the United States. North by introducing a variable tax on carbon. Collective action, although by a subset of countries, would minimize the negative effects of price competitiveness. The result would be the closure of coal production. However, unlike the regulations, this measure would also put pressure on the use of other fossil fuels, including gas, to produce electricity.
It would obviously be preferable to establish an adequate carbon price floor at the EU level. However, countries heavily dependent on coal, such as Poland and Germany, are reluctant to support such an approach. This should not prevent Ireland or any other country from going forward. The production of clean electricity is essential to help stop climate change.
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