State infrastructure must pass tougher climate change rules

Consumers, industry and business to face higher taxes on fossil fuels – Robert Watt

Future State infrastructure projects will have to pass tougher climate change rules, or else not go ahead, a top civil servant has said, in a major change in the Government’s attitude to global warming.

"We are now pricing the carbon emissions of any new Government investment at the price it will cost us to eliminate those emissions at a later date," said secretary general of the Department of Public Expenditure and Public Reform, Robert Watt.

"This raises the bar and will help to avoid investments which may lock us in to high carbon patterns of living," he told the Oireachtas Committee on Climate Change.

Ireland must now cut carbon emissions dramatically "which will require changes to society on a scale not seen since the Industrial Revolution", he said.


Rising shadow price of carbon up to 2030 was necessary to prod behaviour change, he said, predicting it would rise from €32 a tonne by 2020, to €100 a tonne by 2030 and €265 a tonne by 2050.*

Consumers, industry and business would face higher taxes on fossil fuels to reflect the true social and environmental cost of carbon, he said. Early next year Minister for Climate Action Richard Bruton is due to outline to Government proposals for scaled increases in carbon taxes over the coming decade.

Currently, carbon tax in Ireland stands at €20 for each tonne of carbon dioxide produced. A rise to €30 a tonne would add about €1 to a bag of coal and about €0.25 to a bale of briquettes, as well as increasing the price of oil and gas.

Consumer prices

An ESRI study has estimated an increase in the carbon tax of €5 per tonne of CO2 will, on average, increase consumer prices (measured by Consumer Price Index) by 0.13 per cent and producer prices by 0.08 per cent.

Mr Watt told the Oireachtas Committee on Climate Action on Wednesday there was commitment on the need to be upfront on the pain of transition, and accept some proposed projects would be rejected because of the scale of associated emissions.

He added: “Addressing our emissions will mean short-term pain for individuals and groups but it will benefit all of us in the long term. I worry that if we promise people this will be cheap and easy, we won’t build the kind of support that will be necessary when it comes time to take tough decisions. We need to be upfront and honest.”

In a briefing note to committee members, Mr Watt said “pricing carbon works and it should be the primary tool in our arsenal to combat climate change”.

*This article was amended on November 15th to correct an error

Kevin O'Sullivan

Kevin O'Sullivan

Kevin O'Sullivan is Environment and Science Editor and former editor of The Irish Times