Reaction: business community: Business representatives have welcomed the decision to abandon the introduction of a carbon tax.
Business and employers' lobby IBEC said that in the context of steep energy rises, and a fall in Ireland's greenhouse gas emissions for the second year running, the tax was unnecessary.
The objective of the tax was to encourage energy efficiency through increasing its cost, said Mr Brendan Butler, director of enterprise at IBEC.
The trend in recent years, however, has been for rising energy and fuel costs. "Increased investment, efficiency and innovation by industry has already achieved the desired result."
He said Environment Protection Agency figures showed Irish greenhouse gas emissions had fallen for two consecutive years, down 3.3 per cent in 2003 and 1.6 per cent in 2002, at a time when the economy was growing.
He said emissions from the business community fell by 14 per cent over the two-year period. Prominent sectors in the Irish economy, such as the financial sector, information and communications technology, and pharmaceuticals, were not heavy polluters.
The proposed tax would have raised €200-€600 million per annum, depending on the level at which it was set, yet would have brought about a maximum drop in emissions of 0.5 tonnes per annum. Current total annual emissions are 65 tonnes.
"Its impact would have been quite small, but at a high cost," he said.
Under the terms of the Kyoto accord, Ireland would have to reduce emissions by nine million tonnes per annum.
Asked if Ireland was not in danger of being fined for not reaching its assigned reduction, Mr Butler said the accord has not been ratified and there were "no discussions anywhere about the terms of sanctions, or fines. Talk of fines is scaremongering."
Mr Butler said IBEC supported Ireland facing up to its responsibilities established under the Kyoto agreement. "Business is responding to greenhouse gases better than the rest of society."
He said the transport industry created a lot of emissions, but the best way to deal with the issue would be to have better roads.
A spokesperson for the Irish Road Haulage Association said the road freight industry was a sector likely to be most affected by the now abandoned measure.
While it agreed that climate change was a major global issue begging address, the association felt the proposed carbon tax would not have resulted in a change in behaviour in the road haulage sector.
The director of the Small Firms Association, Mr Pat Delaney, said the decision was a "victory for common sense" at a time when business was reeling from increased energy prices.
Business in Ireland, he said, was playing its part in reducing greenhouse gases, as was shown by the fact that, in the past decade, primary energy requirements increased by 48 per cent, while gross domestic product increased by almost 102 per cent.
The Chambers of Commerce of Ireland welcomed the decision. Policy executive Mr Robert O'Shea said it was clear from the overwhelmingly negative response to the proposal that it had not been a cost-effective method of reducing emissions.
"It is somewhat ironic that the discussion surrounding what seemed to be the imminent introduction of a carbon tax has helped to prepare businesses for recent increases in energy prices."
