"We would be against a blanket carbon tax for several reasons, chiefly because it would impact on the free movement of goods and ignores the barriers to entry in the market closer to home, " said IWMA secretary Eric O'Donovan.

According to the Environmental Protection Agency, the vast majority of waste for recycling is exported and a carbon tax would add to the costs of shipping it abroad. In 2005, the year for which the most recent statistics are available, 1.15m tonnes representing 83% of recyclable waste was sent abroad. Only 234,000 tonnes were recycled in Ireland.

The most popular destinations for recyclable waste were the UK, Spain, Portugal and Asia.

However, the head of the ESRI's Environment Policy Research Centre, Sue Scott, said industry could be overestimating the initial impact a carbon tax could have.

She said a carbon tax is likely to be introduced very gradually, allowing time for industry to adapt to it. She said any carbon tax is intended to be revenue neutral, which means it will be accompanied by equivalent reductions in other taxes.

"Efficient services are likely to gain from a carbon tax because their tax bill in other areas will fall, " she added.

Yet O'Donovan said it would be next to impossible to shift recycling to Ireland overnight.

"There is a lot of uncertainty in the market. Local authorities act as both operators and regulators and as a result there is uneven competition between the public and private sectors.

"People are afraid to invest in local recycling facilities at the moment. Unless you reduce these barriers you are simply going to increase the cost of waste management, " he said.

The European Commission is currently seeking submissions on its green paper on market-based initiatives . . .including taxes . . . for energy and environmental policy.