Minister for the Environment Dick Roche has said he would be in favour of changing the car tax system to one based on emissions rather than engine size.
Yesterday, a major British government report warned consumers would have to accept new green taxes on travel if climate change was to be tackled in the coming decades.
Asked about the matter in Dublin this morning, Mr Roche said he accepted that changes were needed.
"If we actually change the taxation system so that you're taxing vehicles on the basis of the emissions rather than necessarily on the basis of the cubic capacity of the engine, you can encourage and incentivise people to use, for example, bio-diesel, to use renewable energy sources and to use lower carbon producing sources," he said.