Stern also called for the expansion of a European system of trading pollution credits. In the background, companies such as Airtricity are already trying to preempt the effects an energy crisis might have. This year it launched its plan to create a 22bn European electricity supergrid that would link alternative power sources such as windfarms and enhance security of supply.

Ryanair on the other hand came out with guns blazing as Stern suggested that by 2050 aviation will account for 25% of UK carbon emissions if nothing is done to curb travel. Ryanair boss Michael O'Leary, with typical decorum, decried the statement as the "usual horseshit". He won't be alone at home at least, if the Irish government resurrects carbon tax proposals. But for incumbents in power, it's a delicate balancing act.

Last week the European Commission said that Ireland was set to severely breach its Kyoto emission targets by 2010 and could face fines totalling hundreds of millions of euro. It's clear that something will have to be done to rein in pollution - if only to avoid paying the fines. Consumers already hit with soaring fuel bills are likely to politically crucify any party that introduces additional hefty taxes on their energy consumption. And that leaves the axe most likely to fall on the neck of industry.

But the captains of industry are likely to take a firm contrary stance if the carbon tax idea raises its head above the parapet. No-one likes to pay more taxes, and companies have warned of job cuts and the loss of competitive advantage if carbon taxes are introduced.

In 2003 C&C claimed that a proposed sliding carbon tax scale would be "inflationary" and the environmental benefit "questionable". C&C said that its energy costs from 2003 to 2004 were forecast at over 434,000, but claimed that the then proposed carbon taxes would boost that to over 1m. That included usage by its Tayto subsidiary, which has been since sold to Largo Foods.

Other consumer-focused firms also cautioned against the taxes. Heineken Ireland said that any additions to the company's cost base would make it impossible to cope competitively with the UK and said that if taxes were introduced it would "put in question the viability of our existing production facilities in Cork".

But that could change. If UK brewers are going to be subjected to more wide-ranging carbon taxes, along with the rest of UK industry, the playing field would be on its way to being levelled.

Heineken Ireland maintained that it has already reduced its gas and electricity usage to a point where any further reductions would require significant expenditure that does not provide an adequate return on investment.

And as the merits or otherwise of carbon taxes come again to the fore, Irish emissions credit trading firm Agcert is still waiting for the big pay day. Traded on the London Stock Exchange, the company last week saw its share price remain static at a time when one would have expected Stern's report to provide a fillip.

"I'm not surprised anymore by anything that happens in the markets, " said Agcert chief executive Bill Haskell, speaking from the company's Florida office.

"Some trading companies did get a boost [from the report] and some didn't." He said the company's stock ownership is relatively concentrated and that its larger investors have stayed on board since the flotation last year. That's despite the stock stumbling along the way. The share price is down roughly onequarter so far this year.

Agcert's customers include the world's biggest mining firm, BHP Billiton, as well as utility firms such as Electricite de France and Canada's Epcor power company.

The company can't sell to US firms as the country isn't a signatory to the Kyoto Agreement.

Agcert's ship may not yet have come in, but Haskell thinks it's on the way. even if Europe hasn't got its act together just yet.

"The current market sentiment towards Agcert and its competitors is a result of a myopic view that focuses on the EU's needs, " said Haskell. "We've seen so much development in other parts of the world that we have a lot of confidence that there will be other markets that will be larger than the EU." He thinks that within a couple of years Agcert will be reaping the benefits of tougher environmental regulations.

And those tougher regulations are the thing of nightmares for many Irish companies.

One of the top 20 electricity users in the State, Waterford-based Smartply, has also raised warning flags over any carbon taxes. The Coillte subsidiary said it uses carbonneutral biomass to generate much of its "primary energy" and called on the government to penalise inefficient electricity users.

CRH is another company that could be hit hard. A number of its Irish subsidiaries claim that carbon taxes would cripple production. One subsidiary, Kilkenny-based Ormonde Brick, said carbon taxes were a "direct tax on production".

Last week the company said it would close for up to three months after Christmas due to "overstocking". There has reportedly been a sharp downturn in sales.

Other CRH subsidiaries that could face difficulties include Drogheda-based Premier Periclase, which produces magnesia. It claimed to have significantly reduced energy costs since 1990 and that it is already Kyoto compliant.

"Additional costs on us either as carbon taxes or emissions trading will result in our closure with the loss of jobs and exports, " said marketing director Patrick McCleery in 2003.

The government claims that the transport . . . particularly the growth in the number of cars on the road . . . has been largely responsible for the difficulty in meeting emission targets. Had the government's road-building programme been more efficient and systems designed effectively, motorists might not have been spending hours stuck in traffic with their vehicles emitting greenhouse gases.

Meanwhile industry sources remain stoic.

"We recognise that everyone has their part to play, " said one, whose company has already invested heavily in energy conservation. "If a tax was introduced it would have to be equitable. It's a real competitive issue for us."