A report by the Irish Fiscal Advisory Council (Ifac) and Climate Change Advisory Council provides one of the starkest warnings yet of the potential costs involved in failing to adapt to the new climate reality.
It found that the Republic – on a per capita basis – had the highest emissions target gap of any EU member state, meaning it was the least likely to meet its 2030 target of reducing emissions by 51 per cent on the basis of its current trajectory.
According to the Environmental Protection Agency’s latest projections, the Republic is set to reduce its greenhouse gas emissions by 29 per cent only by 2030.
The report estimated that if the State continued with its existing climate policies and took no further action, it could be hit with fines or costs of between €8 billion and €26 billion.
The wide range of the estimate reflects the difficulty in predicting how close the State will get to meeting its climate and renewable energy targets, and the price of emissions permits under the EU’s emissions trading system (ETS).
If the State follows through on its “ambitious” climate plan, this would reduce the potential costs by more than half to between €3 billion and €12 billion, noted the report. But it cautioned the plan was not being delivered “at the scale or the speed required”.
The report, “A colossal missed opportunity”, warned that the State faced a stark choice, either “act now or risk substantial costs later”.
It recommended three key actions the State could take to avoid these costs, which include upgrading the energy grid, accelerating the roll-out of electric vehicles and supporting changes in land use and farming practices.
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“These measures would cost just one-tenth of capital spending planned by the Government out to 2030. And they are less than half the upper-cost estimate for missing targets,” it said.
The first of the three recommendations entails a €7 billion investment in the national grid, which it said would cater for much “bigger flows of energy” particularly from renewable sources.
A €4 billion investment to reduce the price of electric vehicles (EVs) to below €15,000 would enable the State to reach its target of having 845,000 private EVs on the road by 2030. There are 80,000 EVs only in use in the Republic.
It also proposed rewetting 80,000 hectares of peatlands for €1 billion or less, which it said could also deliver “massive reductions in emissions at a low cost”. This much land is equivalent all of Bord na Móna’s peatlands.
The Government could also look at changing incentives in agriculture, the State’s largest emitter of greenhouse gases. Measures around breeding, the lifespan of animals, and fertiliser type could substantially lower emissions in a cost effective way, it said.
The report concluded that the Republic had two options to offset risks. Either it could “just knuckle down and start to hit the targets” by putting in place more ambitious measures or it could buy compliance by purchasing annual emissions allowances from other member states.
“This is a clear case of being able to reduce a massive fiscal risk. Ireland can take actions now to offset potential costs down the line,” said Ifac chairman Seamus Coffey. “It can do so in a way that doesn’t threaten the wider sustainability of the public finances.”
Climate Change Advisory Council chairwoman Marie Donnelly said: “While we have made some progress in reducing emissions, our pace of change is not enough to meet our national and EU climate targets. The Government must take clear and decisive action now to transition to a climate neutral economy.”
