Buyers of SUVs and big-engine cars could face a new tax related to the amount of carbon dioxide and other emissions their vehicles produce.
The Minister for the Environment, Dick Roche, made the proposal after a new report found improved emissions performance from cars had not led to any overall benefit to the environment.
The report from the Environmental Protection Agency included a set of 60 indicators on how the environment is performing.
On the key area of transport, it found the number of private cars had doubled in 15 years and the volume of road traffic predicted for 2010 has already been reached.
The agency said while there has been progress in manufacturing cars with reduced emissions, there has been no overall benefit to the environment.
EPA Director Mary Kelly said policy makers need to change travel patterns and consumer choice, particularly given the impact of transport on climate change.
Mr Roche maintained the Government's Transport 21 plan would boost public transport and said the row over Dublin Bus would be solved sooner rather than later.
However, he said additional measures would be required - including more closely related taxation with emissions from exhaust pipes.
