ECONOMICS

 

BY JOHN REYNOLDS

PERSONAL PERMITS RULED OUT

CARBON TRADING:THE BRITISH government has abandoned plans to introduce personal carbon allowances.

Despite opposition from Westminster's Environmental Audit Committee, Environment Secretary Hilary Benn deemed the idea "ahead of its time," too expensive to administer and too complicated.

Irish proposals to reduce emissions - by introducing a carbon tax or a 'cap and share' carbon permit scheme - are still being considered by the Government, but rising oil, food and energy prices could also see them shelved for the time being.

The ESRI said last month that although a carbon tax would help to substantially reduce Irish greenhouse gas emissions, it is unlikely to prevent us overshooting our Kyoto target even further.

An alternative proposal by environmental economist Richard Douthwaite is to issue carbon permits to every Irish citizen. The total amount of these would be in line with the share of Ireland's emissions from road transport that is allowable under the EU's Kyoto limits.

Any company wanting to sell petrol and diesel would then have to buy the sufficient number of permits, and the money generated from selling these would compensate people for the consequential rise in fuel prices.

The less fuel a person uses, the more they would stand to gain financially. This encourages people to use less fuel and ensures that wealthier drivers - who tend to use more fuel - pay more, Douthwaite contends.

DEBATE ON IRELAND'S BIOFUEL SCHEME HOTS UP

BIOFUELS:WITH US BIOFUEL subsidies threatening to spark a trade war between the EU and the US, questions have emerged over Ireland's current biofuels policy.

Under the current excise relief scheme for "green" fuel, 16 companies including well-known firms such as Irish Food Processors, One51, Topaz Energy, Maxol and Cooley Clearpower are eligible for excise relief - effectively subsidies - totalling €213 million between 2006 and 2010.

Although Maxol produce the majority of bioethanol - made from milk whey - for the Irish market in 2007, a spokeswoman for the Department of Communications, Energy and Natural Resources (DCENR) confirmed that other firms are importing bioethanol. Therefore Irish taxpayers are subsidising imported biofuel produced from foreign sugar cane. It isn't known if this sugar cane is grown using sustainable methods and ethical labour practices.

A spokesperson at One51 confirmed that they are currently importing bioethanol made from sugar cane, adding that it is sourced through reputable traders in Europe.

Far more sustainable current sources of biofuel, such as cooking oil and animal fat, do exist, and figures from the Department indicate that Irish Food Processors is the largest such producer. According to figures submitted to the EU State Aid division, the DCENR has budgeted for subsidies of €25.59 million per year between 2008 and 2010 for bioethanol, and €20.09 million per year for EN590 biodiesel.

The issue over excise relief scheme is that it is an expensive way of reducing carbon emissions. Over its five years, it should save 1.2 million tonnes of CO2, at a cost of €177 per tonne. However, at current prices it would cost just €26 per tonne to buy credits to offset those emissions.

Further apparent flaws in the policy are highlighted in the Bioenergy Action Plan published by then Energy Minister Noel Dempsey in 2006.

It states that it will be "an acknowledged challenge" to meet the EU target of substituting 5.75 per cent of fossil fuels with biofuels produced here in 2010.

The target would mean covering huge swathes of the countryside with a dazzling vast yellow blanket of oilseed rape grown to produce biodiesel.

This plan would demand 50 per cent more of current farmland under all crops having to be devoted to oilseed rape.

Meeting the EU's 10 per cent target for 2020 is even more unlikely. It "would almost certainly involve importing biofuel feedstock or ready blended biofuel," the report adds.

According to the DCENR, Minister Eamon Ryan is preparing to launch a public consultation next month on a new national biofuel scheme.

"I have long stated that biofuels are necessary as contingency in relation to security of fuel supply but that we can not allow their development to create food security issues," said Ryan.

ENERGY SAVING WORK CREATES JOBS:

GREEN COLLAR JOBS:GROWING NUMBERS of unemployed construction workers may provide an opportunity to boost our economy by creating an army of "green-collar" employees.

Although the number of young men signing on here has increased by 63 per cent in the last year, according to CSO figures, those laid off in the manufacturing and construction sectors may have skills which can be transferred to "increasingly in-vogue" green-collar jobs, according to Labour's finance spokesperson Joan Burton.

The term refers to jobs such as retrofitting insulation to buildings, installing solar panels, solar water heaters, wood-chip boilers and other green technology.

By copying the strategies that have attracted jobs in IT, financial services, pharmaceuticals and high-value manufacturing, Ireland could also capitalise on the rising global demand for high-value products such as wind turbines and solar panels.

In addition, the IDA has set up a clean-tech unit to go after opportunities in these areas. Meanwhile, Forfás, the industrial development policy agency has commissioned a study by consultants EPS Consulting looking at the business opportunities across the entire environmental goods and services sector.

A recent report published by Britain's Department of Environment predicted that global green industries will be worth as much as the global aerospace sector - in the region of €430bn - by 2010.

As much as a quarter of America's workforce - 40m people - could have a green collar job by 2030 according to a recent report by energy economist Roger Bezdek.