Amid the white noise surrounding last week’s budget, the government made a number of announcements with potentially profound and long-term implications for Irish climate policy. Much as the PD’s allegedly provided the sauce in the meaty Fianna Fail coalition sandwich, it seems that the Greens are now flavor of the day.
The introduction of a carbon tax attracted most comment. A level of €15 per tonne of carbon was chosen. According to Finance Minister, Brian Lenihan: “The yield from the Carbon Tax will be used to boost energy efficiency, to support rural transport and to alleviate fuel poverty. The Carbon Tax will also allow us to maintain or reduce payroll taxesâ€.
The yield from the carbon levy is expected to be €250 million in 2010 and €330 million in a full year. The differential is explained by the exemption on domestic heating fuels until Spring 2010 (politically wise) and the unfortunate exemption of coal and peat until a commencement order (September 2010 has been mentioned as a likely date for this commencement order).
The exemption of solid fuels follows an extensive lobbying campaign which focused on the potential for loss of revenue from cross-border trade, or the possibility of cross-border smuggling. This is a threat that is likely to have been exaggerated somewhat; solid fuels are the most environmentally damaging per unit of energy, and should therefore be dis-incentivised. The budget does the opposite.
One aspect that has been overlooked in the debate around the design of the carbon tax is the battle royale between Departments Finance and Environment; this was decisively won by the latter. Finance – Departments and Ministers both – are allergic to one thing above all else: the dreaded hypothecation of tax revenue (using it for a specific purpose).
This carbon tax revenue will, however, be hypothecated. A permanent revenue stream has been secured for energy efficiency measures which insures an adequate level of investment for years to come. Given the investment levels required to bring our buildings up to an acceptable level of efficiency, this is a welcome development.
The funding will be channeled into a newly created National Energy Efficiency Retrofit Programme (as proposed by the IIEA) in 2010. Of total funding of €130 million, Minister Ryan will oversee €90 million, €36 million of which will be ring-fenced for retrofitting households experiencing energy poverty. In addition the Department of Environment will launch a €40 million retrofit programme for social housing. This represents more than double the allocation for the same measures in 2009 and a seven-fold increase on the 2008 allocation.
Minister Ryan also announced the incipient introduction of: “…a save-as-you-pay scheme. The up-front cost will be carried by the utility company and the work will be paid off as the person savesâ€. The manner in which this SAYP programme and grant-aided schemes interact to provide attractive options for homeowners under the umbrella of a National Programme will be vital; this is an issue currently under consideration by government.
According to the Minister the 30,000 houses receiving a retrofit in 2009 HGH will be doubled in 2010, and again the year after with the objective of retrofitting 100,000 houses per annum – this would approach a level of ambition necessary to upgrade the housing stock within a 10-15 year period. It should be noted that the 30,000 figure exaggerates the amount of activity in the market as it includes the majority of homes which only choose one intervention.
The work of the IIEA in this area was acknowledged (of sorts) in the Dail debate on the introduction of the carbon tax.
The remaining revenue will be used to reduce payroll taxes such as PRSI, and household benefits will be increased to offset fuel poverty, as proposed by ESRI in both cases. The tax was not therefore introduced as a revenue raising measure as was widely assumed in the media and other quarters in the run up to the budget.
In another significant development, a very ambitious Heads of Bill for a climate change law was published. This Bill that comparable with NAMA in terms of the scale of its ambition and its potential long-term transformational implications for the economy. It would enshrine a long-term emissions target of -80% on a 1990 baseline by 2050, as well as establishing an independent Climate Change Committee (CCC) within the EPA with many roles, including the provision of advice to government on climate change strategies (five-yearly), and reporting on annual progress.
It contains several excellent ideas, but I will focus on two areas that need attention: it would enshrine in legislation a 3% annual reduction target to 2020; and it does not clarify specifically if the Climate Change Committee’s advice would be published.
In the first case, the proliferation of legally binding targets is becoming confusing and deeply unhelpful. Under the law we would have a long-term target (2050), an EU target for 2020 in the domestic sector, National Climate Change Strategies which would presumably include intermediate (five-yearly) targets, and annual targets on top of all that. Surely the latter is unnecessary.
On the issue of publishing, this is a requirement that is clearly stated for all Commission advice in the UK Bill. It should be noted that the Irish Bill mirrors in many parts its UK forerunner, and credit is due to the UK for providing leadership.
The objective of the law should be to help develop a long-term strategic vision, and the means by which that vision is to be achieved. CCC reports would provide sensitive advice on controversial and unpopular issues such as sectoral targets. If unpublished the advice may be ignored, and we run the risk of climate change policy becoming a zero-sum political negotiation, rather that a strategy based on cutting edge scientific, economic and technological advice. Freedom of Information legislation is not sufficient to ensure the levels of transparency required.
What is clear is that the Green Party are now beginning to add a distinctive flavor to public policy making in this country, and decisions which are being taken now have long term implications for the country.
Fine, except the 3% per annum reduction target was promised two years ago and is only now happening, and secondly, 3% is miniscule and will have little effect.
As time is of the essence, the reductions need to be bigger sooner in order to stimulate change quickly and get us on the right track. Otherwise it will be business as usual for years with only minor adjustments, and we don’t have the luxury of time for that.
The 10:10 initiative launched by Minister Gormley, actually a carbon copy of the British 10:10 (or is it an EU-wide initiative?), could achieve more, and more quickly, than some small annual target.
The Minister himself pledged to do a 10:10, or cut his own carbon footprint by 10% in 2010, by taking one less plane journey next year. This is laughable really. As Minister for the Environment, and as leader of the Green Party, the party of climate change, anything less than cutting all his private flights and all but the absolutely essential work-related flights sends out the wrong signal.
10:10 has taken off dramatically in Britain, with a great many local councils, and many individual towns and villages, including all of their inhabitants, all pledging to cut their footprints by 10% in 2010. The first 10% is easy, it’s the low-hanging fruit, unless of course you have already reduced your footprint significantly and are looking at, well, the higher fruit.
For the campaign to work in Ireland, it needs high-profile figures to step forward and count themselves in. Figures like, say, Pat Kenny, Brian Lenihan, Marian Finucane, anyone with serious influence across the board.
But the Green Ministers have certainly put in place some useful strategies, as you describe, and these will have major benefits, both in terms of tackling the problem and generating new employment.
As you cut your carbon related activities by 10%, so economic activity is cut by some percentage or other. This course of action will lead to even more unemployment .
I am afraid this whole cutting business, has not been thought out properly.
I think the 10:10 initiative was thought up in Britain by Franny Armstrong of the Age of Stupid. At least, she said on her Copenhagen netcast today that it was her most successful idea so far.
Economic activity has to be decoupled from carbon, for if it is not, then we remain on a ‘business as usual’ path, which is obviously the most destructive thing we could do.
It doesn’t mean the end of economic activity, but the start of a new era of sustainable activity. Renewable energy is limitless, but natural resources are not, so the new era, while having endless amounts of new energy, will have to work with a finite amount of natural capital. One of these is arable land, which is currently being lost to drought, erosion, salination, flooding, development, pollution, etc.
The first great ecological collapse could happen in the sea, as the world’s oceans are becoming more acidic as a result of absorbing more than usual carbon dioxide from the atmosphere.
These are tiny steps in the right direction, and completely overshadowed by the giving away of billions of public money to the banking elite, their bondholders and shareholders. It is the servicing of this avoidable debt, and the skewing of policy toward the needs of the soi-disant ‘financial services’ sector that will make it much more difficult for us to promote a sustainable future.
The Greens have done us all an historic disservice by allowing by their lack of ambition to prop up a moribund political and economic system that is incapable of making the intellectual and political changes we need to face the future.
@ Coilin
I wish 10-10 all the best. We need top down as well as bottom up strategies. I think that 10 10 is, for the most part, an awareness raising exercise.
@ Denis
Doesn’t necessarily work like that. Depends how smart policy is. One example: all the modeling done on carbon tax suggests that it has positive impact on economic growth if introduced on revenue raising measure.
Cutting emissions can create jobs. Sweden and Denmark have demonstrated how growth and emissions can be decoupled.
@ Pope
I hear where you are coming from, but these are not small steps. A national retrofit programme, for example, could create thousands of jobs, dramatically cut emissions, increase energy security, reduce fuel poverty and result in warmer more valuable homes for millions.
It really is going too far to credit the Green party with these changes.
The government would have introduced a carbon tax because it needs the revenue. The Climate Bill with associated exemptions would probably also exist since it follows Britain’s law by about two years.
But if the Greens have caused these things, I hope you think it worthwhile. They ensured the creation of NAMA, an institution based on principles that are the polar opposite of anything sustainable.
Why do Green government ministers come out in support of citizen campaigns like 10:10 and Stop Climate Chaos? Don’t they realise how ridiculous the message of “government minister demands government action” looks to people? They have some neck to think that they speak for the sustainability movement in Ireland.
Three Rock Churches’ Environment Group is showing the film “The Age of Stupid” in Wesley College on Thursday 25th at 7.45 p.m. with free admitance. We propose to introduce the 1010 concept and ESB HALO free Home Energy Survey at the end of the film showing what people can do now.