Climate and nature fund is ‘a gamechanger’ in addressing monetary gaps up to 2030, says Ryan

The new €14 billion infrastructure, climate and nature plan combined with the future fund for Ireland is the most significant part of Budget 2024, according to Green Party leader Eamon Ryan.

Speaking at a briefing, the Minister for the Enviroment, Climate and Communications said it had been challenging in getting it across the line and took several months to negotiate. “It was one of the difficult ones we had, because it’s complex and innovative,” he added.

What was a first for climate and nature by being in effect a sovereign fund, was designed not to be inflationary and to act in a countercyclical way, while the level of funding at €3.15 billion would address climate plan gaps up to 2030 and help deliver on the EU nature restoration plan.

[ Budget 2024: Main points ]

The fund would enable “big lumpy projects that need large chunks of finance to get through even in a difficult economic situation”, Mr Ryan said. This would be particularly useful in meeting “the biggest challenge of all in transport”. This was in a scenario where there was a National Development Plan ceiling of €35 billion for projects and yet “there was a €100 billion ask” for the sector’s requirements.

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“What is striking home now was that the mechanisms we put in for carbon tax is really working,” he said, with €780 million this year; a sum set to go up every year separate to the budget process.

“All revenue raised from this increase in carbon tax will be used to ensure the most vulnerable are protected from unintended impacts of the tax increase, to part fund a socially progressive national retrofitting programme, and to encourage and support farmers in the green transition, he said.

The tax when introduced was “controversial but correct” and while Sinn Féin opposed it, they had belatedly recognised its fiscal value, he said.

The rate per tonne of CO2 emitted for petrol and diesel will go up from €48.50 to €56.00 from tomorrow as per the trajectory set out in the 2020 Finance Act 2020.

The budget had also secured record funding of €380 million for residential and community energy upgrades, including the Solar PV Scheme – a €24 million increase on last year which “means that more funding than ever will be available to make homes warmer, healthier, more comfortable and less expensive to heat”, he noted.

Mr Ryan said he expected that major transport projects would be able to overcome planning system difficulties, including Dart plus in Dublin, Cork metropolitan rail and BusConnects – and there would see less judicial reviews in the future.

He acknowledged a big challenge in securing enough drivers for scale up of the use of buses in urban and rural areas “but I’m confident we will have the drivers to provide the service”.

He confirmed €200 million is to be provided for new roads but this was not causing tensions with his partners in the Government. He said he was trying to persuade Fine Gael and Fianna Fáil that this should be targeted at bypassing major towns and bringing them back to life.

There was a critical need to take hard political decisions in transport, he said, which was not about budgets or drivers. A radical change in approach was needed “so buses can get through”. This was need to ensure sustainable transport and to meet climate targets.

“The establishment of an infrastructure, climate and nature fund is a landmark development that can help underpin climate action and nature restoration for years to come,” said Oisín Coghlan, chief executive of Friends of the Earth.

“It means that whoever is in Government after the next election will have funds to invest in getting off fossil fuels and reducing pollution, no matter what happens to tax receipts. It’s not everything we need to fund a fair and fast transition but it is a substantial down payment,” he added.

It was equally significant, he said, that whoever is in Government can only spend this money on climate and nature, increasing the chances of the policy consistency that households and businesses need to drive the transition to zero pollution.

It was very welcome that this part of the rainy day fund could be drawn down from 2026 “but given that when it comes to climate breakdown and biodiversity loss, the rainy day is already here”, he warned.