Downturn means CO2 targets now achievable
IRELAND IS now likely to meet its Kyoto targets for greenhouse emissions because of the downturn in the economy, an authority on environmental and economic policy has said.
Frank Convery, professor of environmental policy at UCD, said yesterday that the extraordinary turnaround in the country’s finances had made the exacting Kyoto targets suddenly achievable. His view was shared by Dr Lisa Ryan of Comhar, the Sustainable Development Council, which Prof Convery also chairs.
Prof Convery said that as recently as September 2008, it was being forecast that GDP would continue to grow at a rate of at least 3 per cent. But less than five months later the ESRI concluded that GDP had already dropped by 9 per cent bringing us back to the 2005 income level.
“We are now unlikely to overshoot our Kyoto target in 2012, and won’t have to spend up to €300 million set aside to buy allowances to cover the overshoot,” said Prof Convery.
The Kyoto target for Ireland is 63 million tonnes of CO2 emissions per annum. During 2005 and 2006, emissions had risen to 70 million tonnes, making it seem likely that the State would have to buy carbon credits after 2012.
Prof Convery was speaking on the role of the carbon market in Europe as part of UCD’s series of lectures on “Meeting the Climate Change”, held at the Royal College of Physicians.
He said that low energy prices, and the drop in carbon prices, will take some pressure off business and households as the recession continues.
The main focus of the lecture was the European Emissions Trading Scheme (ETS), which is now in its second phase.
According to Prof Convery the chances of a carbon tax in every EU state is remote so the ETS is effectively the only mechanism which allows a price signal to be put out on carbon.
Under the ETS scheme, emitters are given a quota in the form of tonnes of emissions of CO2 gases each year. The overall number of tonnes allowed is limited. The companies covered under the ETS include power companies, cement and glass manufactures, steel manufacturers, pulp and paper manufactures.
However, under the pilot scheme of the ETS the price of carbon dropped from a high of €25 to zero when it became apparent that too many allowances had been allotted. Prof Convery also said that splitting the market into trading (subject to ETS) and non-trading (such as transport, agriculture, household and not subject to ETS) was also a disadvantage.
Under the second phase which began last year the overall supply of allowances dropped by 6.5 per cent, he said. He also said that the third phase, which begins in 2012, will be more robust, with airlines included for the first time.
However, in recent months the price of carbon has again fallen dramatically from a high of €26 to a little over €10.
Some Irish companies now had surpluses of carbon allowance to sell, he said. They included CRH, Platin (1½ million tonnes), Alumina in Limerick, (1.1 million tonnes), Quinn Cement (1.0 million tonnes) and CRH, Limerick (0.9 million tonnes).