The House approved a motion investing €20 million in the new multilateral carbon credit fund.
The fund, said Minister for the Environment Dick Roche, was offered by the European Bank for Reconstruction and Development in conjunction with the European Investment Bank.
"The bank will use its expertise in project investment in eastern Europe, and its prior experience with carbon fund management, to secure contracts for projects to verifiably reduce emissions in return for emission reduction credits."
Mr Roche said the projects would be fully validated and accredited by the UN super-visory bodies and the credits would only be issued for verified emission reductions.
Labour's environment spokes- man Eamon Gilmore said his party was opposing the motion. He said it constituted the start of an obligation on the people and taxpayers to pay for carbon and the Government's failures over the past 10 years and that it constituted the start of a bill for the taxpayer which might be as high as €500 million by 2012.
Green Party spokesman Ciaran Cuffe said climate change was a deadly serious issue. In Darfur, tens of thousands of people were dying from drought which could be attributed, wholly or partly, to climate change.
Padraic McCormack (FG, Galway West) said that for the period 2008 to 2012, Ireland had agreed to limit annual greenhouse gas emissions to 13 per cent above the 1990 levels.
While emissions in 2004 had been reduced to 23 per cent over 1990 levels, achieving the protocol target, without compromising economic and social development, was extremely challenging.
The motion was approved by 58 votes to 49.
