The Taoiseach has described a damning report which sets out the potential costs of missing legally binding climate targets as “highly speculative and uncertain”.
Micheal Martin also hit back at accusations that the Government is “rowing back” on its climate commitments, saying that its work over the last four years to tackle climate change has been “very significant”.
The report found that Ireland could face potential costs of 27 billion euros if it fails to reach its 2030 target of reducing emissions by 51%.
Taoiseach Micheal Martin defended the Government’s response to meeting its climate targets (Brian Lawless/PA)
The figure comes as part of a worst-case projection under which Ireland does not implement any further measures to reduce emissions and the price of purchasing credits from other EU member states.
On the other hand, the Government could reduce this risk and potential costs to between three and 12 billion euros if it follows through on measures from its own plans that have yet to be enacted.
The Government has been widely criticised by the opposition over the report, with Labour leader Ivana Bacik claiming that taking climate action was “not a priority” for it.
Speaking about the costs cited in the report, Mr Martin told the Dail: “Highly speculative, by the way, highly uncertain.
“I listened to the authors this morning, highly uncertain. Highly speculative in terms of what will transpire.
“It will be very challenging because as soon as we move on any one of them, different elements of the opposition will oppose some of them in respect of measures that we’ve announced and that we’ve taken.
“There’s a huge retrofitting programme underway, and our public transport usage is up 25%.
“We are fully committed to all of the public transport initiatives that we had committed to in the previous government.”
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However, Ms Bacik accused the Government of making “no effort” to meet its 2030 targets.
“There’s been a clear rowing back from the position on climate taken by the previous government, of which the Green Party was a member,” Ms Bacik added.
“Here’s some examples. Just months after denying that this would happen, you are now going to import dirty LNG (Liquefied Natural Gas) into our country, and you’ve abandoned in your Programme for Government the spending ratio for active travel and public transport.
“Your programme will instead favour the building of roads, baby roads, as (US President Donald) Trump might say.
“Incredibly, your Programme for Government makes no reference to the legally required carbon budgets or to sectoral emission ceilings, which might set a pathway for achieving net zero.”
Mr Martin denied the Government is “rowing back” on its commitments, saying the last four years has been “very significant”.
He added: “In many respects, when you juxtapose the growth in population, growth in economic activity to the reduction in emissions, it is quite a remarkable story in terms of what Ireland has achieved. But it’s not enough.
“On your phrase ‘dirty LNG’, remember today is about energy security. We have a responsibility that if anything was to happen or interrupt our current gas supplies, we do need a backup.
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“It would be irresponsible not to do that and and also, we’re doing it consistent with the European frameworks and consistent with the legal advice, by the way, that we’ve received in respect of that issue also.
“I don’t think it’s good enough for you to just kind of throw that aside as dirty LNG.”
Ireland is bound by targets for renewable energy consumption and reductions in greenhouse gas emissions under multiple EU schemes, which come with significant potential costs for non-compliance.
The joint report by the Fiscal Advisory Council and Climate Change Advisory Council says that Ireland needs to act on the climate targets now to avoid incurring “colossal costs”.
Most countries in the EU are off track to meet reduction targets under the Effort Sharing Regulation (ESR), but Ireland is among the worst-performing countries for exceeding its targets of million tonnes of carbon dioxide equivalent (Mt CO2 eq).
On a per head of population basis, Ireland is the worst performing country under the ESR targets, which covers non-aviation domestic transport, buildings, small industry, waste and agriculture emissions.
Marie Donnelly, chairwoman of the Climate Change Advisory Council, described Ireland as a “standout laggard” in this regard.
If Ireland fails to comply with its EU requirements, the scale of the potential bill depends on how close it gets to meeting each of its targets and the price of compliance. The price also depends on broader progress across the EU in achieving the same targets.
Fiscal Advisory Council chairman Seamus Coffey said costs could be up to 12 billion euros, depending on what measures are taken by the Government (Niall Carson/PA)
The report finds that if the Government follows through on its Climate Action Plan, this would reduce potential costs by more than half.
However, the councils warn that the plan is “not being delivered at the scale or the speed required”.
Asked about the large gap between the lowest and highest cost estimates, Fiscal Advisory Council chairman Seamus Coffey said: “The range is very broad – but it doesn’t include zero, it doesn’t include negative numbers.
“A range that broad that doesn’t get over zero suggests what side of the line we’re going to be on.”
Pressed on where he expected the final bill to be, he said there was still a lot of uncertainty but said it could be between 10 and 12 billion euros, depending on what action the Government takes.
The report presents the Government with a choice between spending now and reaping the benefits of ramping up efforts, or transferring massive amounts to EU neighbours for Ireland’s non-compliance and falling into deepening emissions targets.
The authors argue that it makes the most sense to spend money now and avoid a “colossal missed opportunity”.
“Recent events have highlighted how climate action can benefit people. Ireland’s reliance on imported fossil fuels left it exposed to geopolitical disruptions and price rises during the cost-of-living crisis.
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“More recently, Storm Eowyn showed the need for more secure and stable energy infrastructure.
“Acting now can help reduce these vulnerabilities and avoid large transfers to neighbouring countries. Ultimately, these are funds that could instead be used to improve people’s wellbeing.”
The report states that failure to meet targets has already cost Ireland significant amounts of money. In the past four years, Ireland has lost out on 500 million euros of potential revenue from carbon credits it could have sold but is instead holding on to the bridge the gap to the overall target.
The authors add: “Swifter action would do more than just avoid hefty payments and meet Ireland’s agreed commitments. It would transform Ireland’s society, making it healthier, more sustainable, and more energy secure.”
The prices that will apply under the ESR are highly uncertain and will ultimately depend on the extent to which other EU member states achieve their targets.
The price of “emissions allocations” from countries that have overperformed on their reductions will be agreed by the two states involved. As many countries are due to miss their targets, there will probably be a shortage of allocations to go around, and therefore, market prices are hard to predict.
With a shortage of allocations, some countries could face infringement proceedings, which may be set at the level of the last allocation purchased.
However, Ms Donnelly said “there is hope” and that “a few measures could make a big difference”.
As examples, she said seven billion euros could be spent on upgrading Ireland’s electricity grid, four billion euros could be spent on reducing the price of 700,000 electric cars to below 15,000 euros and ramping up charging infrastructure and one billion euros could be spent on supports for forestry and peatlands.
This amounts to 12 billion euros – one-tenth of the capital spending planned out to 2030.