Last month, Minister for Climate Darragh O’Brien brushed off warnings from the State’s fiscal and climate watchdogs as “back-of-the-envelope stuff”.
Brushing aside a sober, peer-reviewed analysis by the Climate Change Advisory Council (CCAC) and the Irish Fiscal Advisory Council (Ifac) signals a troubling game of chicken with Europe over our climate obligations.
The IFAC-CCAC report estimated that if Ireland continues on its current path, failing to cut emissions significantly this decade, the State could face compliance costs of €8 billion to €26 billion after 2030. This range represents the likely cost of buying carbon credits from countries that overachieve their targets, leaving us with nothing but a receipt.
Framing this as a “colossal missed opportunity”, the watchdogs urge that this money be invested now in actions that actually cut emissions, such as retrofitting buildings, electrifying transport, and supporting farmers to decarbonise. These actions would make us less vulnerable to fossil fuels, strengthen energy security, create jobs and make agriculture more resilient. Given Ifac’s remit for fiscal prudence, it does not recommend increasing expenditure lightly.
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O’Brien argues there’s “no agreed formula” for calculating such penalties and that discussions in Brussels are “ongoing”. But this misses the point. The compliance regime is not a speculative fine that might never materialise – it’s a core part of the EU’s climate law. The idea that Ireland might be let off the hook because we’re small, or because the final accounting won’t be done until 2032, is wishful thinking.
There is also a belief that because some other countries are also off track, Europe might look the other way. That is also misguided. On a per-capita basis, Ireland is set to exceed our emissions allocations by a far greater margin than any other member state, and the EU as a whole is well on track to meeting its targets.
Our public finances, meanwhile, are in excellent health. If anything, the EU could fairly ask why one of its wealthiest members, and one of its biggest per-capita polluters, should be granted exceptions, when poorer countries are making greater efforts to cut emissions?
What makes this gamble even stranger is that if the Government simply met its own domestic carbon budgets, there would be no compliance problem at all. Our national targets, enshrined in law, are just as ambitious as the EU’s. Missing them will be costly regardless, because overshoots must be made up in later years.
The fiscal council’s message is simple: use the money now to decarbonise – and reap the benefits of early action – rather than pay penalties later. With record budget surpluses, this is the moment to make one-off investments that permanently lower emissions: upgrade homes, expand public transport, electrify industry, support farmers to shift practices, and accelerate the clean energy roll-out.
Those investments clean our air and reduce dependence on volatile fossil-fuel imports, making us all less vulnerable. It should be a political no-brainer.
The Taoiseach recently blamed planning appeals and “overregulation” for slowing progress on renewables, arguing “we can’t have it both ways”. But litigation and bureaucracy are not the biggest barriers to climate progress, as he suggested.
The electricity sector, which is most exposed to these, is actually decarbonising fastest. The biggest shortfall is the Government’s failure in transport, buildings, and agriculture. There is clearly a lack of appetite for the investment needed in these areas. Regulation of powerful vested interests is also needed. For example, allowing energy-hungry data centres to expand their use of fossil fuels only deepens the problem.
The forthcoming Climate Action Plan is the Government’s chance to prove it still takes its climate and fiscal responsibilities seriously. Because of the gulf between policies and targets, this year’s plan must deliver a step-change in both spending and enforceable regulation, with concrete actions, not just more strategies and aspirational targets.
So the question is this: will the Government use its financial and political capital now to secure a cleaner, cheaper, fairer future, or will it keep betting that Europe won’t enforce its own climate law? If it’s the latter, then we’ll not only have lost time and money, but also the opportunity to build a sustainable country.
Taoiseach Micheál Martin recently said Ireland “cannot litigate our way” to address climate change. That is true. But we also cannot talk our way into compliance. The test now is whether the Government will match its words with actions.
In 2022, he told Cop27: “If this generation doesn’t step up urgently, future generations will not forgive us. As leaders, it is our responsibility to drive the transformation necessary ... Our citizens will become increasingly cynical, weary and hopeless if words are not urgently matched by deeds; if commitments do not generate new realities.”
Will those words prove to have been a call to action, or a premonition of failure? The Government still has the chance to deliver, but the window is closing fast.
- Hannah Daly is a professor of sustainable energy at University College Cork
