It seems a shame to bring the words “environment” and “tax” into the same sentence but the Commission on Taxation Report has risen to the challenge for the purposes of meeting its remit to investigate “fiscal measures to protect and enhance the environment including the introduction of a carbon tax”.

Arguably Ireland already has a carbon tax, as we levy mineral oils excise duties at rates which reflect, to some extent, the carbon emissions of the fuels. The Commission considers the matter further, and in a chapter which explains more about methane than any reasonable person might ever wish to know, sets out a stall for a new carbon levy.

The guiding principle is that the carbon levy would in some manner be related to the cost of traded carbon credits, with a floor cost being set. While ultimately the charge will be set by Government, the report carries some illustrative costs of a levy at a carbon credit floor cost of €20 per tonne of CO_2.

This would result in an increase in petrol and diesel costs per litre of about 5cent, with a corresponding increase in the cost of home heating oil. The biggest change, from a domestic standpoint, would be in the price of peat briquettes and coal, the former because it wasn't subject to mineral oils excise in the past, the latter because of an exemption in respect of domestic use. The price of a bale of briquettes would rise by 48c, and of a tonne of coal by €56.

The Commission suggests that the carbon tax should be clearly visible at the point of final consumption to ensure it is not seen as ‘just another tax’. It might take more than that to get this particular message across.

The Commission went on to consider if emissions from other sources, notably agricultural activities, should be subject to a carbon levy. These were rejected for various reasons, not least the difficulty of measuring emissions in certain cases.