Taoiseach Leo Varadkar has said the cost of retrofitting all homes in Ireland as part of the drive to reduce carbon emissions would be "phenomenal", amounting to €50 billion.

He said long-term loans could be part of the solution with homeowners repaying the loans with savings from lower fuel bills.

Speaking at a meeting of the European People's Party (EPP) in Zagreb, Croatia, Mr Varadkar said: "When we look at the cost of that it's absolutely phenomenal.  We're a small country. We've estimated the cost of retrofitting all homes is something like €50 billion, which, of course, a government could not afford."

He said the European Investment Bank (EIB) could play a role in proving long term loans, helping people "upgrade and insulate their homes and then pay that back over a long period of time with the savings they've made from their energy bills. Those models do exist".

Addressing delegates as part of a panel debate on climate change, Mr Varadkar acknowledged that part of the Government's plans to reduce carbon emissions meant "a big change in our midland region".

He told the congress: "We're taking peat out of the system by 2023, that's our domestic fuel source, and that requires a big change in our midland region."

He said the Irish Government had tried to build consensus around climate action and the carbon tax.

"Nobody likes increasing taxes, certainly centre right parties don't either, we believe that it's a crucial part of the policy mix to bring about climate action and stop climate change, it's not the solution on its own but without it there is no solution," he said.

The Government aimed to set a target of €80 per tonne of carbon dioxide by 2030, ring-fencing monies for climate action and to support those who "will lose out through increasing fuel prices, particularly the elderly and industries that need to be transitioned".

Mr Varadkar said Ireland had banned fracking and the exploration of oil.  The Government would continue to explore for natural gas as it was a cleaner fuel, and it would be part of Ireland's energy mix for the next 20 or 30 years, "probably longer, if carbon-capture storage works out".

He said there was now a two-to-one split in favour of public transport over roads in Ireland.

Mr Varadkar said it was important to move the debate from anxiety and fear to action and opportunity.

"It's about cleaner air, it's about warmer homes, it's about shorter commutes.  If we get this right we can turn something which is a potential catastrophe into something that's an opportunity for a better economy and a better society."