Irish carbon emissions pricing plan a ‘major departure’

Higher costs for carbon emissions must be introduced to encourage people and businesses to cut climate-damaging carbon emissions, a top civil servant has declared.

Future State investment projects "will have to price any future greenhouse gas emissions at the estimated cost that Irish society will have to bear in reaching our climate targets", said the Department of Public Expenditure and Public Reform secretary general Robert Watt.

Outlining the "major departure" in a speech to the Oireachtas Committee on Climate Change, the top civil servant said: "Just as prices matter to the individual, so too they matter for Government. We are now pricing the carbon emissions of any new Government investment at the price it will cost us to eliminate those emissions at a later date. This raises the bar and will help to avoid investments which may lock us in to high carbon patterns of living."

Mr Watt acknowledged current policy failures in addressing climate change. “There is not enough incentive for individuals, whether businesses or consumers, to reduce emissions. As a result, the market fails by overproducing greenhouse gas emissions, to the detriment of society as a whole,” he added.

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In Ireland's case, that would probably mean "a shortfall" of 100 million tonnes of carbon emissions by 2030, which the State would have to cover by way of "compliance costs". This could cost €3 billion, suggested Green Party leader Eamon Ryan.

He rejected the view of the Citizen’s Assembly that climate-change policy should be given to an independent agency, although he accepted that responsibility currently lies with the Minister for Climate Action, while responsibility for policies to reduce emissions falls across several departments.

He added: “The story of modern humanity has been our ability to conquer the elements, but it’s hard for us to conceive of a world radically altered by rising temperatures.

“The price that will be paid for the emissions we release into the atmosphere today won’t be paid by those of us in this room but it will be paid for by our children and their children.”

Showing leadership

In a briefing note to committee members, Mr Watt said Ireland could not solve climate change alone "but we must show that as a developed country we are capable of making the adjustment required".

This would require the kind of political commitment that only a cross-party committee could deliver. “That is why I don’t think this committee should underplay the challenges we face.”

The Government’s change is not radical enough, said Mr Ryan, saying past State investments should be retrospectively climate-proofed now. Carbon pricing combined with carbon taxes were just one of the elements required, he added.

The National Development Plan will have to change “if we are serious about climate action” as its provisions on transport were insufficient and it would lead to more “urban sprawl”.

Mr Watt rejected that view and noted the plan had made significant commitments on development of “compact cities”.

Secretary general of the Department of Finance Derek Moran said a targeted balance between exchequer-supported expenditure, taxation policies and regulation are necessary to deliver upon our climate change objectives.