Pay now, be rewarded later – the political hot potato of climate change

The major benefits of halting climate change will be felt by future generations, but the financial costs of taking the necessary actions will be borne by the current generation.

While some climate mitigation measures will improve today’s health, by and large tackling climate change will require today’s citizens to bear the brunt of measures that will benefit their grandchildren and great-grandchildren. That makes it politically difficult to get acceptance for any painful measures required today.

However, US president Donald Trump’s rejection of the Paris Agreement appears to have strengthened the resolve of other governments to tackle the climate issue.

Last week, the Irish Government launched its five year National Mitigation Plan to tackle climate change. This week the Climate Change Advisory Council (CCAC), of which I am chairman, published its periodic report, providing an assessment of Ireland's progress in tackling climate change and making policy recommendations to Government.

John FitzGerald: Still fumbling in the dark on growth data

---

Why it pays to charge for waste by weight

---

Electric cars a game changer for motor-tax revenue

---

Groundhog Day beckons for economy in danger of overheating

---

The Government’s plan incorporated a number of the council’s suggestions. In particular, the Government’s code on setting expenditure priorities will be revised to include a weighting for tackling global warming, which is largely ignored in the current framework. This will be really important in ensuring that public expenditure choices, such as investments in new electricity generation or the future public transport fleet, are evaluated by including in the mix the social costs or benefits in relation to climate change.

Using the price system to favour climate-friendly behaviour needs to be a key part of the Government strategy. The social cost of future greenhouse gas emissions should also be priced in via the tax system, and through the EU Emissions Trading System.

This price signal is needed to encourage us to act sustainably. Even more important, it is needed to drive essential investment in research and development, and in infrastructure to provide renewable energy.

The National Mitigation Plan, while it contains a wide range of suggestions on possible measures and policies to tackle global warming, would have benefitted from a detailed analysis of the success and failures of existing policies, to help guide future policy.

The plan has many ideas for action but it contains very few decisions.

Already emissions in 2020 will be 15-20 per cent over target. Without major new policy initiatives, not only will we miss the 2020 targets, but Ireland will continue on a path of rising emissions. We need decisions and actions that will move Ireland back on track and on to a sustainable path, so that by 2050 Ireland is no longer adding to climate change.

So the next revision of the National Mitigation Plan needs to include solid decisions, concrete actions, and measurable targets.

Decarbonise Irish society

The different initiatives will need to be combined in a coherent framework, showing how we will decarbonise Irish society at the least cost. This will require a co-ordinated response across different departments, and a set of mutually coherent and integrated policies.

For example, it now looks likely that, over the course of the next decade, we will move towards sustainability in road transport through a major shift to electric cars. The fall in the cost of electric cars and the rapid increase in their range, as battery technology improves, will make them the “cheap” option in the 2020s.

In addition, electricity could be used to replace other forms of fossil fuel energy for heating.

However, before going down this road, we need to be convinced that, by 2050, electricity will itself be produced in a sustainable manner.

Thus government needs to co-ordinate actions on transport, on heating, and on how electricity is generated. Acting too early to replace gas heating with electricity could actually add to emissions. However, acting too late in developing the infrastructure for electric transport would also be a lost opportunity.

As transport moves from fossil fuels to all-electric, the electricity industry will need to change to accommodate the new demands. EU policy on emissions trading needs to be reformed to provide assurance that electricity will transition to being fully renewable by 2050.

Too often we talk about having to follow EU “rules”. However, in tackling the problem of global warming, appropriate EU-wide policies could help drive change, and support Ireland and other member states to reach their 2050 climate change goals. For example, a rule requiring all cars sold in the EU to use renewable energy would drive change in motor manufacturing and consumer choices. EU-wide action would also reduce the risk that making the necessary changes to our way of life would result in a competitive disadvantage.