If we want to continue as an investment hub we have to get climate right

Decarbonisation is an economic and environmental imperative. Carbon budgets are just as important as the October fiscal budget

The reduction of greenhouse gas emissions now is primarily an economic challenge not an environmental one. Yet there are few signs that all of government has rationalised this.

The Dáil has agreed a series of carbon equivalent reduction targets for three five-year periods out to 2035. We await the allocation of responsibilities between sectors for meeting those targets and a new Climate Action Plan.

Reaching these targets is the only show in town if we are to meet our international commitments. Doing so will involve doing the hard yards and taking the hard choices that removing carbon and associated emissions from our economic activity involves.

Climate is an economic driver. It must become the key one. There is simply no long-term trade-off between climate and the economy. Even if we choose to set aside for a moment the catastrophic environmental consequences of global warming, the economic consequences alone of inaction will be significant. Decarbonisation is in truth an economic and environmental imperative.


If we want to continue as a hub for economic investment we need to get climate right. What stood for a debate on turf and carbon tax over the last few weeks should embarrass us all. Cutting bogs and planning cycle lanes are small concerns compared to the big calls Ireland has avoided making.

Simply put, decarbonisation is the single biggest economic transformation we will undertake since independence. The scale of the challenge has been made larger by the slackness of our response.

We require a whole-of-government and whole-of-society response. That will require courageous leadership. It will require a careful and considered presentation of what is involved, and frankness and full disclosure about the urgency we now face.

Another decade

It was for that reason that Labour did not play politics on turf. We cannot allow ourselves to be kidded into an economy versus environment discussion. That is a false dichotomy.

Politicians who say they care about jobs and the economy cannot authentically claim to do so if they think climate action can wait another decade.

The imperative here is our children. The Paris Agreement we signed in 2015 says we can only emit levels of carbon consistent with meeting the target of 1.5 degrees. For us to breach those carbon limits now is to steal the future from our children. It will make global warming worse for them. It is that stark. In India, as we speak, there is disturbing evidence that warming is ahead of schedule.

My interactions with economy Ministers on the floor of the Dáil leaves me concerned. Concerned that carbon budgets and our fiscal and spending plans do not sufficiently align.

Which will be more important in five or 10 years’ time – our annual fiscal budget ritual or our carbon budgets? Why aren’t the two processes joined up? Or more succinctly, when will our political economy and our outdated resource allocation model follow the imperative of our carbon targets?

On an optimistic note the huge saving grace we do have with global warming is that we have solutions. We are not devoid of policy instruments. Progress is being made on offshore wind, on solar. But we need more, and quickly.

These policy levers and opportunities will become more important over the decade. More important than inflexible EU fiscal targets or ordinary budgets announced by Ministers at budget time.

If you put the two in perspective, annual fiscal budgets change. With the right interventions we can recover from economic shocks. Just look at May’s stellar Exchequer returns. There is no coming back, though, from botched carbon budgets and missed emissions targets.

Fiscal budget

As the mounting evidence of catastrophic warming confronts us through our screens every night, it may soon dawn on us that carbon budgets are just as important, if not more so, than the annual October fiscal budget.

A different perspective than that which emerged in the last month may manifest itself.

Which brings me back to the State. It was the State that organised our Covid response, and it is the State we will look to to protect us from climate change.

Yet we are citizens of a State which throughout its short history (with some exceptions) has found itself bedevilled by short-termism and a political set that lives election cycle to election cycle.

The reality is that preventing catastrophic warming is our key political and economic challenge for the next two decades. However, there is no real evidence that the system has come to terms with this. The Climate Action Delivery Board hardly met for two years. The siloes of Departments of Finance and Public Expenditure regard climate as a problem for the Department of the Environment. They just don’t get it.

A Cabinet sub-committee just won't cut it. From 2011 we had an Economic Management Council to get us out of the financial crisis. Climate action requires a similar, concerted and determined focus. It must be led out of Merrion Street and by all the key players at the very top of government. Slippage and missed targets should not be tolerated.

The existential challenge ahead demands rapid and radical changes to how our traditional system of government, governance and public investment is done. The current system is simply incapable of driving the transition we need to make.


Labour intends to publish a Bill to legally mandate the direct involvement and engagement of the Departments of Finance and Public Expenditure in the fight against climate change.

We hope to make it law to oblige both Ministers to have regard, in the first instance, to our emissions targets in their departmental priorities.

We want to leave them in no doubt that this is not a task they can leave to somebody else. Until we have decarbonised fully the public finances and our taxation systems must serve to drive our climate goals and a just transition.

Ged Nash TD is Labour spokesman on finance, public spending and reform