In 1990, the OECD highlighted the vital importance of halting climate change and suggested a tax on greenhouse gases as a key policy to bring this about.
Two years later, the EU proposed that a carbon tax be implemented in each member state. That never went ahead, as it would have required unanimity – Ireland at the time was one of the countries that opposed such a policy. This proved very short-sighted.
If for the past 30-odd years we had taxed emissions, by now the EU and Irish economies would have largely decarbonised, at minimum cost. Instead, we still have a long way to go.
To reach net-zero emissions requires major investment, taking many years to plan and construct, even if adequate funding is available. The delayed implementation of climate action, including taxes on carbon pollution, means that we have a bigger problem today.
A recent paper by Brian O’Gallachóir of UCC looked at the progress we have made over the period of our first carbon budget, from 2021 to 2025. While we will probably exceed the legislated limit for emissions over the period, the overrun is likely to be less than 5 per cent.
Under the `polluter pays’ principle, we should raise the cost of fossil fuel cars through higher taxes
The three sectors where most progress has been made are electricity, agriculture and the household sector, all coming close to our targets for 2025.
Electricity generation has benefited from a big expansion in renewables, mainly wind energy. Another major factor in reducing emissions from electricity has been the increased interconnection to Britain. The emissions from imported electricity from Britain are counted as British, and thus as zero for Ireland.
Most of our electricity exports to Britain come from wind, a zero-emission renewable. Further electricity interconnection would add to this favourable exchange. This, as well as major investment in zero carbon technologies, will now be crucial in meeting our target for 2030.
In farming, the main progress achieved has been a by-product of the war in Ukraine. This raised EU gas prices and, in turn, the cost of fertiliser, an important source of greenhouse emissions in agriculture. This led to a major reduction in fertiliser use by farmers. As a result, agricultural emissions have fallen, so that for the period to 2025 they will be close to target.
To reach net-zero emissions requires major investment, taking many years to plan and construct, even if adequate funding is available
Despite higher fertiliser input costs, and lower fertiliser use, farm incomes and output have risen. This shows that appropriate price signals for farmers can result in significant behavioural change, without seriously affecting farmers’ living standards. Natural ways to raise soil fertility, like clover-rich grassland that fixes nitrogen in the soil, are also important.
The Irish household sector, which has experienced rising energy prices, has moderated its energy use and emissions, showing that higher prices do change behaviour.
The biggest overrun in emissions has been in transport. We haven’t seen a major switch from fossil fuel cars to electric ones, which are still a tiny share of the national fleet. Today’s cars last about 20 years, so that decisions on buying fossil fuel cars today will drive high emissions well into the 2030s.
To rapidly change the composition of the national fleet would mean scrapping many of the petrol and diesel cars on the road today, which would be very expensive. So we need to ensure that most new cars bought are electric ones, and make that attractive. That’s why the Climate Change Advisory Council has proposed a much more rapid deployment of charging stations, where we lag behind our EU neighbours.
The council has also suggested a large subsidy for cheaper electric cars. In my view, this is the wrong approach. Instead, under the “polluter pays” principle, we should raise the cost of fossil fuel cars through higher taxes.
Electricity generation has benefited from a big expansion in renewables, mainly wind energy
We have spent €1.25 billion to date on encouraging active transport. The result has been a tiny increase in cycling’s share, but offset by a somewhat larger fall in pedestrian journeys – people have switched from walking to bikes, not out of their cars. Investing in public transport is a much more cost-effective way to get people to switch from private cars.
Progress in reducing emissions from industry has been slow – it can be difficult to achieve.
In particular, it’s hard to reduce emissions from cement production, a very carbon-intensive process. We will need to switch away from housing mainly based on concrete blocks, towards the timber-framed alternative, which locks in the embodied carbon in the wood long after it has been harvested.
If done at scale, shifting to timber for building new homes can also achieve the desirable outcome of cutting building costs.
