October 14, 2021
Government claim that people will be shielded from impact of carbon tax hikes ‘doesn’t stand up’ – Darren O’Rourke TD

Sinn Féin spokesperson on Environment, Climate, Communications and Transport, Darren O’Rourke TD, has criticised the government’s decision to push ahead with an increase in the carbon tax in Budget 2022 saying it will only add to people’s hardship and better climate action decisions are available.

Teachta O’Rourke said:

“Sinn Féin have consistently pointed out that the carbon tax will not work when affordable alternatives aren’t an option.

“Better choices are available, but this government are tied to an approach of penalise not incentivise when it comes to climate action.

“Tomorrow people will still need to drive to work and put the boiler on to heat their home.

“This price hike won’t change that, as they simply can’t afford to change to the alternatives yet. Instead this regressive decision will just make their financial situation worse.

“We reject the claim from the government that recycling one third of carbon tax receipts via social protection payments, is proven to insulate those on the lowest incomes from energy poverty.

“Government spokesperson after Government spokesperson point to an ESRI report claiming it shows 20% of the lowest income households would actually be better off under their approach.

“I contest that position. While the report in question does make that claim, there are a number of very significant limitations to the study which, I believe, undermine it.

“In the first instance the report does not account for changes in prices beyond those directly arising from the higher carbon tax. This is a major limitation, particularly in the context of huge increases in energy prices on the international market. The wholesale price of natural gas has increased by 250% since the start of the year for example.

“Secondly, the report does not accurately measure energy poverty, due to the fact that the government themselves failed to act on a recommendation from their own 2016 Strategy to Combat Energy Poverty, calling for an appropriate methodology for measuring and tracking energy poverty levels across the state to be designed. But when they did assess the impact of the range of Government redistributive measures on energy poverty, they found that none had a mitigating effect. At disposable income levels >10%, >15%, and >20% after housing costs, none had a mitigating effect.

“The Government do not have a sound basis to make the claims that they are making.

“The carbon tax is lazy climate action. It rewards those who are wealthy enough to avoid the tax by switching to alternatives – buying an electric vehicle, moving to public transport, retrofitting their home – while targeting those who are just about getting by.

“Sinn Féin reject this approach and in government we will help people transition to greener cleaner alternatives.

“In the meantime, the Government must be honest with people about the impact of the carbon tax. They should substantiate their claim that households in the bottom four income deciles will see all of the cost of the carbon tax increase offset, with the bottom three deciles being better off. I don’t believe the ESRI report provides the basis for this claim.”

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