Carbon Tax Hits Poorest Households

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Press Release from Irish Rural Link

Irish Rural Link Welcomes the ESRI Report on Effects of Carbon Tax

Irish Rural Link (IRL)– the national network representing the interest of rural communities – welcome the ESRI report published Thursday June 6th, which confirms that Carbon Tax has a greater impact on households of low and fixed income.

 

Effects of Carbon Tax on Rural and Low Income Households

Before and since carbon tax was first introduced, IRL have argued that households on low income and those in rural areas will be impacted most by the addition of carbon tax on fossil fuels.  Energy poverty remains high among households on low income. Almost 50% of people living in consistent poverty are unable to adequately heat their homes. A further number go without heating during the year*.The ESRI report  highlights that poorer households spend a greater share of their income on energy and carbon taxes impacts on both energy affordability and income inequality. The report also recognises that carbon tax has a bigger impact on rural households.

In our Pre-Budget Submission for 2019 and prior to the Budget announcement in October 2018 we called on the Government not to increase carbon tax for the very reasons outlined above – that it would impact most on low income and rural households already living in energy poverty and push those on the edge into energy poverty.

 

Climate Change and New Thinking

While the advent of Climate change is no longer in dispute, and measures need to be taken to reduce our carbon emissions and meet our targets, a just transition approach must be taken on this.   We have always argued that Carbon tax and Climate change measures should not be budgetary matters and needs a whole rethink and new way of how we build housing, heat our homes, the way we work, farm, travel.   This will take a lot more than increasing the Carbon tax on fossil fuel and diesel.

 

Options

The Department of Finance are currently consulting with the public on the options for the use of revenues raised from increases in carbon tax – CLICK HERE.  The ESRI looked at revenue recycling of carbon tax to help reduce the impact of increased carbon tax on low income households. They found a targeted measure approach to be more beneficial to these households.  However, while recycling revenue to households through, e.g. increased fuel allowance or a cheque payments (like water charges), may help reduce the risk of being pushed further into fuel poverty, it does nothing to reduce carbon emissions if they are still reliant on fossil fuels to heat their homes as no alternatives are available.

 

Call for Climate Change Summit

IRL call on the Government to hold a climate change summit with all the necessary stakeholders from all sectors where all proposals are teased out.  This summit must happen as a matter of urgency.

*(SILC,2017)

 

 About Irish Rural Link:

Irish Rural Link represents the interests of locally based rural groups in disadvantaged and marginalised rural areas by highlighting problems, advocating appropriate policies, sharing experiences and examples of good practice. It has a membership of nearly 600 rural community groups dedicated to sustainable rural development and represents rural communities at a national and international level

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