The Minister for Communications, Marine and Natural Resources has categorically ruled out the introduction of a carbon tax on fuels.
In a report published today, the Economic and Social Research Institute called for the introduction of such taxes for domestic users, in order to help cut pollution.
In its report, the ESRI acknowledged that a move to add tax to fuels like petrol, coal, gas, peat and home heating oil would increase the cost to consumers.
Coal prices would rise by 22%, peat by 30% and home heating oil and gas by 11%, the report says.
The ESRI argued that subsidies could be introduced to offset the hardship to the 220,000 families who struggle to afford fuel, but says the move is essential to ensure that Ireland meets its international commitments on reducing pollution.
'Not a runner'
However, Noel Dempsey told RTÉ News that a carbon tax was not a runner at this time, because it would damage the economy at a time when oil and gas prices were rising.
He said the last thing the Government should do is add to price rises and cause problems for competitiveness.
Mr Dempsey said that putting such a surcharge on fuels could trigger demands for higher wage increases.
Asked about the ESRI proposal that a second gas supply line from Scotland should be built to guarantee security of energy supplies, the minister said that if there were an economic case for it, he was prepared to consider it.
However, he said the best way to guarantee availability of necessary gas would be to develop an indigenous supply off the west coast and that those resources needed to be developed urgently.
Asked about five jailed protestors objecting to the Corrib gas project, Mr Dempsey said he was extremely concerned for the men in jail, for the project and for the image of Ireland.
He said the sooner the problem was resolved the better, and called for good will and give on all sides.
