Ireland needs water charges to meet environmental targets, OECD warns

Country still suffers from ‘high water losses and hot spots of low drinking water quality’

Ireland stands alone among OECD countries in not having domestic water charges, according to a new review. Photograph: The Irish Times

Ireland stands alone among OECD countries in not having domestic water charges, according to a new review. Photograph: The Irish Times

 

Ireland needs to reconsider the introduction of domestic water charges, increase waste fees and implement congestion charging to meet its environmental targets, the Organisation for Economic Co-operation and Development (OECD) has warned.

In a major review of Ireland’s environment performance over the past decade, the OECD found environmental pressures remain too closely linked to strong economic growth.

On water, it recommended the Government reconsider the reintroduction of water charges. Ireland stands alone among OECD countries in not having such charges.

This requirement, it concluded, is in the context of a need to accelerate investment in water supply and sanitation.

The Government should “assess whether the funding model for water services is sufficient to cover the high investment costs and whether introducing household water charges would be appropriate”, the review noted.

The report also highlighted that only 60 per cent of the Irish population is connected to advanced wastewater treatment, the third lowest level among OECD countries.

Investment in water infrastructure has increased considerably, “but Ireland still suffers from high water losses, hot spots of low drinking water quality and inadequate wastewater treatment,” it found.

While there has been increased ambition on climate and protecting biodiversity including ambitious policy initiatives and large public investment plans, “these need to be swiftly implemented to alleviate the growing pressures from intensification of agricultural practices, demographic development, urban sprawl and road traffic”.

The OECD set out a wide range of recommendations to be implemented across the economy to improve environmental outcomes, especially on addressing climate disruption and accelerating decarbonisation.

It also called on Ireland to move faster towards a nationwide ban on bituminous fuels and to consider including other “smoky” fuels such as peat and wet wood.

It found that recycling of municipal waste has stagnated in recent years and as a consequence, there is a need to introduce a levy on the incineration and export of reusable and recyclable waste, while increasing the current landfill levy.

The revised National Development Plan must “prioritise low-carbon transport infrastructure, energy efficiency, eco-innovation and a lower carbon footprint for agriculture”, the review added.

In that context, it recommended the introduction of a range of measures to reduce car dependency and “excessive use” in urban areas, most notably the Dublin region.

These include congestion charges and levying those who have car park spaces at their place of work, while allowing employers to make tax-free payments to employees who walk or cycle to work.

It also supported setting a specific target to reduce biogenic methane associated with livestock production. It recommended removing VAT exemptions on fertilisers and animal feeds, “as well as the tax concession on fuel used for farm operations; recycle the revenue to support general agricultural services or individual farmers on the basis of farm size and type”.

The report acknowledged increased climate ambition in recent years but strongly recommended the Government “maintain the commitment to progressively increase the carbon tax rate; continue to provide compensation measures targeted at the most vulnerable people”.

The OECD recommended moving more quickly towards a nationwide ban on bituminous fuels such as coal and considering the inclusion of other smoky fuels such as peat. File photograph: iStock
The OECD recommended moving more quickly towards a nationwide ban on bituminous fuels such as coal and considering the inclusion of other smoky fuels such as peat. File photograph: iStock

This should, the OECD added, “gradually increase the diesel tax rate so it at least reaches the petrol tax rate [and] phase out the price cap for diesel used by road hauliers”.

Given the likely shift to electric vehicles over the coming decade, it said the Government should prepare to shift the focus of road transport taxation from fuel use to road use through road use pricing based on geographic information systems.

Specifically, it called on Ireland to develop a roadmap to phase out fossil fuel and other environmentally harmful subsidies.

On sustainable mobility and freight, it called for follow through on the commitment to two-to-one spending on public transport over roads and an allocation of 20 per cent of the total transport capital budget for cycling and pedestrian infrastructure projects.

It backed measures to change road layouts, giving more space to cyclists, pedestrians and public transport. It suggested the Government should enforce local regulations to ensure all developments promote compact settlements with easy access to transport links and include a network of safe walking and cycling routes.

OECD environmental recommendations for Ireland

Taxes and subsidies

-Maintain commitment to progressively increase the carbon tax rate with compensation measures targeted at most vulnerable people.

-Increase diesel tax rate so it at least reaches the petrol tax rate; phase out the price cap for diesel used by road hauliers.

- Shift focus of road transport taxation from fuel use to road use.

- Develop a roadmap to phase out fossil fuel.

- Remove VAT exemptions on fertilisers and animal feeds, as well as the tax concession on fuel used for farm operations.

Economic recovery

- Consider linking support for businesses and households to meeting climate requirements.

- Ensure revised National Development Plan continues to prioritise low-carbon transport infrastructure and energy efficiency and a lower carbon footprint for agriculture.

- Increase spending on research and development on climate and low-carbon energy solutions.

Mobility and freight

- Follow through on the commitment to two-to-one spending on public transport over roads; allocate 20 per cent of total transport capital budget for cycling and pedestrian infrastructure.

- Continue to change road layouts, giving more space to cyclists, pedestrians and public transport.

- Consider congestion charges.

- Increase taxation of purchases and use of internal combustion engine vehicles; continue to extend charging points on road network.

Air, waste water and biodiversity management

- Move faster towards nationwide ban on bituminous fuels such as coal and consider including other “smoky” fuels like peat.

- Introduce a levy on the incineration and export of reusable and recyclable waste, while increasing the landfill levy.

- Accelerate investment in water supply and sanitation and assess whether introducing household water charges is appropriate.

- Accelerate expansion of marine protected areas and the restoration and management of raised and blanket bog habitats.

Climate change mitigation

- Fully implement the Climate Action Plan; continue to engage citizens in climate policy; provide stronger regulations and price signals.

- Accelerate phase-out of fossil fuel boilers and switch to renewable alternatives for residential heating; ensure residential grants target deep renovations.

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