Carbon energy taxes will have to be introduced, but not in a way that will damage industry's ability to compete internationally, the Tánaiste and Minister for Enterprise, Trade and Employment has said.
"I am concerned about anything that can drive up the costs for industry and make us less competitive and put jobs at risk.
"My priority is to maintain as many jobs as possible in Ireland," Ms Harney, speaking in Dublin, said.
The Minister for the Environment, Mr Cullen, wants to introduce extra energy taxes from the end of 2004 in an effort to cut Ireland's carbon-dioxide emissions, as required by commitments made under the Kyoto Agreement.
Under the deal, Ireland's emissions by 2010 must be no more than 13 per cent higher than in 1990. In 2001, however, they were 31 per cent above permitted levels, the fifth-highest in the world on a per-capita basis.
Acknowledging that Ireland must meet its international obligations, the Tánaiste said they must be met "in a way that does not jeopardise Irish business and Irish jobs. And I believe that we can do that if we are sensible."
The consultation paper expected shortly from the Minister for Finance, Mr McCreevy, would allow the Government the opportunity to hear the views of industry, environmental organisations and others, she said.
Companies using large amounts of energy would be vulnerable if this was not done in the appropriate way. "We have already said that we will have to use a carbon tax in order to achieve our objectives under Kyoto," she said.
"But it is the manner of how we do it, the level," she said, adding that it would not be acceptable to force companies involved in emissions trading - where Irish emissions are traded for cuts in developing countries - to pay such a carbon tax.
Companies would have to be given lengthy notice about the level of any such taxes. "All of this would allow companies to plan to ensure that they don't get any sudden shock that could put the company in jeopardy," the Minister said.
Playing down suggestions of a Cabinet rift, the Tánaiste said: "A minister wearing an environmental hat, obviously, will always be very anxious to have heavy taxes on energy. A minister with an industry, economic perspective has a different objective.
"Clearly, we would meet our Kyoto objectives in the morning if we closed down all of our energy-using companies. But nobody wants to see that happen. Certainly the Government doesn't want to see that happen.
"So I think we have to be practical and sensible.
"We have to meet our objectives in a way that bears in mind the need to be competitive and to maintain jobs in Ireland and not send Irish jobs to other locations where the Kyoto requirements would be implemented in a very different way.
"I am very environmentally conscious, too. You can have jobs. You can have a clean environment. And you can have both. It isn't a question of choosing one, or the other. It is all a question of how you do it," she said.
Last night the Department of the Environment insisted that Mr Cullen is not intending to propose any measure that would hamper business. "He is a very pro-enterprise minister. But everybody recognises that we have to do something," said a source.
Meanwhile, the Irish Business and Employers' Confederation warned that recent European Union climate-change decisions will cost the 40 biggest companies in Ireland €200 million a year, rising to €600 million in exceptional circumstances.
Using emissions trading, Ireland and Irish companies could reduce any Kyoto bill by paying for investments in the developing world that would cut emissions from less-efficient industries.
"A tonne of CO2 from there is the same as a tonne from here," said Mr Donal Buckley of IBEC.
