Carbon tax windfall to hit €1bn


The Irish Independent has reported that an Oireachtas committee recently heard that the Government could be receiving over €1bn a year in carbon-related taxes in five years' time and must decide what to do with this huge windfall.

Consultant Peter Brennan gave a presentation on climate change from the Dublin-based Institute for International and European Affairs (IIEA) to the Joint Committee on Energy Security and Climate Change. Mr Brennan is Chair of the IIEA's Climate Change Group - a High Level Stakeholders' Working Group.

He said there was little general understanding of the scale of the challenge Ireland faced in meeting the ambitious targets for reductions in carbon emissions set by the EU. "Officials involved are keenly aware, but I think major sectors in the economy are only now getting to grips with it at a practical level" - Mr Brennan told the committee.

The final EU agreement next year is expected to aim for a 30pc reduction in carbon emissions by 2020. With such a short timescale, urgent decisions were needed as to what would be required to achieve it.

Mr Brennan said that Ireland needs to follow the example of other countries and work out the costs of reducing emissions in different sectors. "We cannot pick the sector for carbon reduction, unless we know if it could be achieved cheaper or better in some other sector" - he said.

The biggest problem is in agriculture, which accounts for 40pc of Ireland's emissions. Despite the EU's huge policy drive for carbon reduction, there had been no serious proposals from the agriculture commissioner's department. "Irish researchers are looking for different ways of farming, which might produce a 20pc reduction - but agriculture is the sector least open to solutions" - Mr Brennan added.

After 2013, electricity generators will have to 'buy' carbon emissions. Combined with the inevitable carbon tax, this could see consumers contributing €1bn a year to the Exchequer. "We have to decide what to do with this money - should it be used to help further reductions - by subsidising conservation measures, for instance - or to help those suffering from 'fuel poverty' or to offset the serious stress which these policies will cause in parts of the economy?" - Mr Brennan asked.

In further discussions Mr Brennan told the Oireachtas committee that Ireland is pushing for the inclusion of forestry as a 'carbon sink' in future EU emissions trading schemes.

Papers produced by the IIEA showed the inclusion in greenhouse gas calculations of forestry – which absorbs carbon from the atmosphere and 'sinks' it in wood – could reduce Ireland’s emissions by four million tonnes of carbon - a considerable amount of the 'distance to target' the State must travel.

Mr Brennan said that two of most difficult areas to effect a reduction in carbon emissions were in transport and agriculture.

In the case of agriculture, the State is presenting the scientific community with a considerable challenge in devising a way for farms to combat climate change. Areas currently being looked at include animal husbandry, feeding stuffs, fertiliser, effluents and other wastes.

There is, according to the institute, potential for waste-to-energy processes from farming activities. This may include capturing gas from slurry and using it to generate electricity or heat.

With regard to transport, Mr Brennan told the committee’s Liz McManus that the electric fuel cell offered hope of reducing emissions from one of the largest contributors to greenhouse gases. Without a move to electric power, Mr Brennan said he did not believe targets which would be in place for 2050, could possibly be met.

Other ways to combat transport emissions included planning decisions that were based around not using cars. In this regard, Denmark and Israel had shown the way, he said.