The real culprit for pollution are buses and lorries. In the case of Dublin unfortunately, it has as measured at College Green and O'Connell St pollution levels much higher than the EU average mainly created by Dublin buses dirty diesel engines and exceptionally amateur trafffic engineering by Dublin City council.
The worst diesel polluters are buses. One diesel engined bus spews particulate pollution equivalent to 128 petrol cars, and NOX pollution equivalent to 39 cars. A bus moving out from a stop has to use its engine in the most inefficient manner and as well, due to bad planning, the likes of Bus congested O'Connell St results in major pollution levels. What is worse is that not one bus carries anything like 100 car-driving passengers, and outside of busy periods most operate way below capacity. A highly carcinogenic chemical (3-nitrobenzanthrone) is spewed out by diesel bus exhausts when the engine is under load, i.e. when pulling away from any bus stop. Full power is applied to the engine to pull off at a stop or in stop go traffic i.e. the most polluting way to use an engine
Public transport such as the bus is not sustainable compared to private cars except on the most heavily used routes, consuming on average 60% more energy per person transported (Automotive Advisers and Associates, Hilden, Germany). Dublin buses make the largest contribution to traffic emissions of PM10 [particulates] and NOx [oxides of nitrogen].
The VRT changes that min of the Environment John Gormley made, as you point out is designed to lead to more diesel cars. His stated agenda is to "save the planet" from Co2's, due to supposedly man made Global Warming but he obviously does not care about pollution because diesel particulates will increase heart disease, cancer and chronic lung Asthma etc
Of course future diesel engined cars are being developed to scrub many of these harmful emissions but because of rapacious levels of VRT & VAT all parts of a car (and unbelievably due to the lip service of the Government's "road safety" interest) including ABS brakes, traction control, seat belts air bags are viciously taxed. The VRT changes will also lead to more second hand imports of older designed engines thus more pollution.