Ireland could face €5.5bn climate bill by 2030, says expert

Ireland likely to fined up to €610 million by 2020 for missing targets, says analyst

Ireland could face fines of up to €5.5 billion by 2030 if it fails to bring forward measures to reduce greenhouse-gas emissions in line with European Union targets.

According to an analysis by Joseph Curtin of the Institute of International and European Affairs, the cost of inaction on climate change could have serious implications for the fiscal space of future governments.

He estimated Ireland is likely to be hit with a compliance bill of up to €610 million by 2020 for breaching its current renewable-energy and emissions targets.

However, the fines are likely to be significantly larger under the latest set of EU targets, which compel Ireland to reduce its carbon emissions by 30 per cent on 2005 levels by 2030.


Based on the cost of planting forestry – which sequester emissions – the future price of EU carbon credits, and fines which could apply for residual non-compliance, Mr Curtin estimated these fines could be between €3.7 billion and €5.5 billion by 2030.

The various scenarios used to calculate these fines, however, assume that no further actions are taken to reduce emissions between now and 2030.

Proactive approach

“The purpose here is not to point to looming fiscal catastrophe. Rather it is to underline the need for a more proactive approach to reducing emissions, particularly from agriculture, buildings and transport,” Mr Curtin said.

“With an economy and greenhouse-gas emissions that are once again growing fast, this is a particularly important policy consideration,” he said.

What is required is not new exchequer resources, according to Mr Curtin, but the recalibration of incentives and reallocation of existing resources.

“Take the current capital investment plan which envisages twice as much spending on roads compared to public transport. Meanwhile, apparently there is nothing in the kitty for investment in worthy low-carbon projects such as cycle lanes, or indeed energy efficiency in homes,” he said.

“We need to decide if this is a credible approach in a carbon-constrained world,” Mr Curtin said.

Most of the emissions, which the Government is tasked with reducing, comes from agriculture, transport and construction.

Agriculture is responsible for the largest share (42 per cent), followed by transport and heat use in buildings.

According to the Environmental Protection Agency’s latest inventory report, since the end of the recession in 2011 Irish emissions have largely flat-lined.

While the agency’s data for 2015 has yet to be published, experts believe emissions probably increased and will continue increasing in the years ahead.

As a result, the State is expected to miss its existing 2020 target to reduce emissions by 20 per cent on 2005 levels with the EPA forecasting a 6-11 per cent breach.

The Government, meanwhile, has yet to develop a new mitigation plan even though the last one expired four years ago.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times