Opposition parties and environmental groups have reacted angrily to the Government's decision to abandon the idea of introducing a carbon tax.
Speaking on RTÉ radio, Finance Minister Charlie McCreevy said that the purpose of the tax was to deter people from buying fossil fuels but that spiralling costs were already having this effect.
He said that the people most affected by the carbon energy tax would come from the poorer sections of society, and that on reflection he realised that the revenue raised by the tax would not justify its introduction.
However, the Green Party’s Dan Boyle says the Government is deliberately ignoring the recommendations of an ESRI report which said a carbon tax could have a positive effect on the economy.
Fine Gael and Labour have also criticised the decision. Both parties accuse the Government of deferring a decision on carbon tax until after the next General Election.
The tax had been part of a plan to reduce greenhouse gas emissions as part of the Kyoto agreement. It would have involved new taxes on natural gas, coal and peat and higher taxes on petrol and diesel.
Mr McCreevy said the carbon tax would have led to a maximum reduction of just over half a million tonnes a year in emissions.
Ireland's overall reduction under Kyoto is set at around nine million tonnes a year.
