Carbon emissions reductions could be ‘95 per cent off target’, says Minister

Minister for Climate Action and Environment Richard Bruton has revealed likely "compliance costs" facing Ireland for falling short of its 2020 targets for reducing carbon emissions – which could be as much as 95 per cent off target.

As a result, Ireland has to recommence the purchase of greenhouse gas emissions allowances and renewable energy credits.

Latest estimates suggest the cost will be up to €13 million over the next two years, but in the case of missed renewable energy targets it could be “€90 million or significantly more”. Much higher penalties are likely after 2020.

Mr Bruton said: “Ireland had agreed to reduce greenhouse gas emissions by 20 per cent below 2005 levels. While Ireland has jointly the most demanding targets (the EU average is 10 per cent), Ireland is far off course. Current projections suggest we might achieve a 1 per cent reduction, meaning we would be 95 per cent off target.”

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During the recession, when output in the economy collapsed, Ireland was meeting its climate targets, he said. However, “once economic growth resumed, growth in carbon resumed, highlighting the very significant structural issues which still exist within the economy in terms of reliance on carbon”.

“Ireland will need to purchase compliance in order to meet the 2020 targets. While this cost is currently estimated to be between €6 million and €13 million, depending on the cost of carbon at that time,” he added in a statement on Wednesday.

Ireland was able to reduce penalties “because we can offset the years where we produced less carbon than targeted, with the years where we are now producing more”.

This estimate is in addition to costs already incurred from previous purchases amounting to some €120 million since 2007, he confirmed.

“However, from 2020 onwards the cost of not meeting our climate commitments will grow very significantly, and result in the displacement of productive investment from Ireland with the associated low-carbon economic opportunities,” he warned.

Renewable energy

On renewable energy, analysis by the Sustainable Energy Authority of Ireland suggests Ireland will achieve between 12.7 per cent and 13.9 per cent of its 16 per cent renewable energy target by 2020.

“In the worst case scenario . . . the cost of purchasing renewable ‘credits’ could be in the range €90 million or significantly more,” he conceded.

Mr Bruton added: “It has never been more clear that we need to make a step change across government. I have secured Government approval to develop an all of Government plan which will set out the actions which must be taken in every government department and body.

“I will be seeking to work with colleagues across government to develop new initiatives across electricity, transport, heat, as well as a range of other sectors. The focus will be on implementation.”

Increasing carbon taxes would have a strong role to play and setting a trajectory for increasing carbon taxes between now and 2030.

He welcomed the suggestion by Green Party leader Eamon Ryan in the Dáil that each party should sign up to such a trajectory.

“This would give people certainty in deciding on the types of purchases to make in the coming years, regardless of the shape of the government.”

At Leaders' Questions on Wednesday, Mr Ryan asked Taoiseach Leo Varadkar to agree to a planned increase in Carbon Tax of €20 per tonne in the next budget and €5 per tonne in every subsequent year up to 2030. The increased revenue from the tax would be returned to citizens on an individual basis, he suggested. The net effect for the public of "the carbon cashback" would be to benefit people on low incomes as they use less energy.

Mr Varadkar accepted the merits of the proposal and agreed the best way to proceed was on a cross-party basis but it needed to be carefully evaluated.