Carbon tax must tackle energy poverty and Just Transition

5 tests for Budget's climate credibility

Friends of the Earth has warned that unless today's Budget tackles energy poverty and kickstarts a Just Transition for peat workers, the reported plans for a small increase in the carbon tax risk alienating people while doing little to reduce emissions.

Commenting on media reports that the Budget will raise the carbon tax from €20 to €26 a tonne, Friends of the Earth Director, Oisín Coghlan commented:

"A rise of €6 in the carbon tax is not enough to reduce emissions on its own. Key to the Budget's climate credibility therefore is how the Government plans to spend the revenue and how clear its commitment to future increases is."

The environmental justice organization has set out 5 tests for Budget 2020:

1. Prioritize energy poverty

2. Negotiate a Just Transition deal with the peat worker unions

3. Ringfence all the carbon tax revenue, not just this year's increase

4. Underpin annual increases in legislation

5. Fund popular climate action schemes, such as Solar Schools

1. Prioritize energy poverty

• The Government has so far failed to sit down and talk to groups such as the Society of St Vincent de Paul who represent the interests of those most vulnerable to the impacts of the climate tax.
• The Government failed to produce the review of energy poverty requested by the all-party Oireachtas Committee in March.
• The reported plan to defer the application of the carbon tax increase to home heating fuels until next May is therefore welcome.
• Will the Government now commit to meaningful dialogue with all stakeholders on how to ensure those vulnerable to the impact of the tax are protected and supported to reduce their dependence on fossil fuels.
  
  

2. Negotiate a Just Transition deal with the peat worker unions

• The jobs of peat workers in the midlands are at imminent risk.
• It's 20 years since the Government was advised to end peat-burning for electricity. Instead they planned to continue until 2028, a plan that is collapsing under the weight of its absurd unsustainability.
• The Government has failed to sit down with the trade unions and negotiate a Just Transition Deal for the workers.
• The Government is also dragging its heals on the recommendation of the all-party Committee recommendation for a Just Transition Taskforce with all the stakeholders including the local communities.
• Today's Budget is one more change for this Government to demonstrate that the state will the there to support those from whom the transition to a zero pollution will be disruptive.
  
  

3. Ringfence ALL the carbon tax revenue, not just this year's increase

• The Government has trailed that they intend to ring-fence the revenue from the increase in carbon tax.
• But today's carbon tax increase will only raise about €100 million in a full year, less in the next 12 months if the application of the tax to home heating fuel is delayed.
• That will not be enough to fund energy poverty measures, Just Transition supports for peat workers, and other essential climate action measures.
• Will the Government ring-fence all the money from the Carbon tax (about €500 million) for Just Transition and climate action, not just the €100 million from today's increase?
  

4. Underpin annual increases in legislation

• Today's €6 increase is the carbon tax is not big enough to incentivize much behaviour change on its own.
• It's reported that the Minister will outline plans for the tax to increase by €6 every year for the next decade.
• Householders and businesses need to be confident that the tax will actually increase every year if it is going to shift spending and investment decisions towards zero-carbon options.
• A Budget speech by the Minister for Finance months before an election is not enough of a guarantee of the trajectory of any tax to base investment decisions on.
• The Minister needs to underpin the carbon tax plans in legislation, as has been done with corporation tax, to give householders and businesses the confidence that they will save money by investing in lowering their pollution.

5. Fund popular climate action schemes, such as Solar Schools

• Friends of the Earth has been saying all year that the consumer carbon tax not a silver bullet, it is only one tool in the fight to reduce emissions.
• It is essential the Government frame the carbon tax a part of a broader positive transition, that will have many public benefits, apart from, you know, helping prevent climate breakdown and chaos.
• Friends of the Earth set out 12-steps for a Green New Deal to get off fossil fuels back in January.
• Will the Government use Budget Day to highlight, and fund, some of the climate action ideas that have huge public backing but which are being held back by bureaucratic foot-dragging?
• Our top example is the goal of making "Every School a Solar School by 2025". There is a huge appetite for this among students, teachers and parents but it is hamstrung by a series of obstacles: schools, unlike other community buildings, need planning permission to put up solar panels; the SEAI has been unable to offer any grants for schools to go solar; and like homeowners and farmers there is no payment at all for the electricity schools spill onto the grid, they just have to give away the electricity to the ESB.

Concluding, Oisín Coghlan, commented:

"Budget Day is the one day of the year everyone listens to what our political leaders have to say. The public needs to hear those leaders treat climate change just as seriously as they treat Brexit, it is after all a far more existential threat.

"It is also imperative that the Government and the media do not frame climate action as all about carbon tax and increasing costs. Most climate action has direct benefits for the public, from better public transport to healthier air. Even the carbon tax, if done right, can be fair and progressive."

Notes:

1) Last year Friends of the Earth called for the tax to be doubled to €40 a tonne with all the increase going straight back to taxpayers as "a cheque in the post" and all the existing revenue being ring-fenced for a Just Transition Fund. The Environmental Pillar has repeated that call this year.

2) The Stop Climate Chaos Coalition has published detailed talking points on carbon tax in Budget 2020.