Coalition heads for rift on new EU carbon plan

Radical plans by the European Commission to cut carbon emissions are creating the first serious policy rift between Fianna Fail and the Green Party. The far-reaching plans emerge as efforts to combat climate change come into conflict with business and economic interests. 

The Commission will this week publish the plans to compel member states to reduce carbon emissions, under which Ireland will face a cut of 20 per cent in the next 12 years. The plan involves proposals for cuts in greenhouse gas emissions across the EU, imposing new costs on governments, business and consumers

Informed sources indicated that the emission figures to be revealed next Wednesday would be a starting point for talks. However, as a rich country, Ireland will have to implement large cuts. In recent government discussions behind closed doors, Fianna Fail ministers voiced strong concern about the impact on Ireland’s economy. The Green Party enthusiastically supports the plan, some details of which have already been leaked to EU governments. Governments, including Ireland, have been lobbying in recent months to soften the blow, while Spain, Germany and France have officially complained.  

Some Fianna Fail ministers, including finance minister Brian Cowen, voiced their concerns at cabinet last week. Green ministers John Gormley and Eamon Ryan believe the Irish government should be a strong supporter of the plans. Divisions between Fianna Fail and the Greens are also emerging on the plans for a Commission on Taxation, promised under the agreed programme for government.

The Commission will be asked to examine the case for a carbon tax, seen by the Green Party as a vital part of the effort to reduce emissions, and will also consider other possible environment levies. The Taxation Commission is due to be set up in the coming weeks, but the Department of Finance does not expect it to report for at least two years, potentially delaying the new carbon tax.

The Green Party will vigorously oppose any such delay. Party sources indicated this weekend that measures to reduce carbon emissions - including a carbon levy and adoption of the proposed EU legislation - are among the party’s highest priorities. ‘‘Put it this way - it’s more important to the stability of the government than what’s happening in Dublin Castle,” said one senior party source.

Pat Leahy
© Sunday Business Post 20.01.08