As an EU member, Ireland must aim to keep within demanding limits for future greenhouse gas emissions. This system of national ceilings has been criticised by economists since it first emerged in the 1990s – they argue that the planet has just one atmosphere and that some form of universal carbon charging would be more efficient. Best to focus on demand rather than production, since costs of carbon reduction vary across countries.
Production of carbon-intensive products and services should find the best location, avoiding the arbitrary imposition of country-by-country ceilings with the risk of carbon displacement.
Displacement will see production in a carbon-efficient location constrained, to be replaced with product from less carbon-efficient regions and without any reduction, or even an increase, in worldwide emissions.
The European Commission has recognised the need to address the displacement issue, which has caused concern in agriculture, but which also arises generally.
There is an active proposal to penalise imports into the EU from trading partners which do less than Europe to discourage emissions. European producers are at a disadvantage and the solution is called the Carbon Border Adjustment Mechanism (CBAM).
The EU would impose tariffs on imports from countries with less stringent policies, levelling the playing field. Strong support for this policy shift has come from heavy industries like steel, which have been losing out to Asian competitors.
CBAM acknowledges that the worldwide cost of emissions reduction needs to be minimised and that go-it-alone targets will not suffice. There is little point controlling European emissions if big emitters like China and the US are too slow to follow suit.
This applies within the EU too, since allocating arbitrary targets to each member state will not minimise costs within Europe either.
Critics of the Irish Government’s approach have focused on the plausibility of the national targets: there is widespread scepticism that they can be achieved
The same concern arises within each country when national targets are broken down into sector-by-sector ceilings. The policy which has emerged here is to respect the EU-mandated aggregate limit for Ireland, broken down into emissions targets by sector.
Inevitably, these targets have been controversial, and each sector would like the burden of adjustment to be borne by someone else.
A target is not a policy. Even if the EU ceiling is to be respected, and pending further evolution in EU policy member states will feel bound to do so, there is a choice of strategies to hit those targets.
Critics of the Irish Government’s approach have focused on the plausibility of the national targets: there is widespread scepticism that they can be achieved and previous targets have not been delivered.
There is a deeper problem when a target is not accompanied by a detailed policy. The measures actually announced may not deliver, but even if they do, the costs could be excessive, higher than could be achieved with alternative policies.
Recent examples include the substantial energy use in Ireland for home heating; there are ambitious targets for retro-fitting homes and other buildings with better insulation and heat-pumps.
Government policy is built around the BER ratings and the intention is that the Government will offer generous grants and subsidies designed to upgrade these ratings.
But an Economic and Social Research Institute (ESRI) report suggests that the results will be disappointing. Actual performance in homes is not well connected to BER ratings and they are not a wise trigger for grant eligibility. If the policy achieves carbon reductions, it will be at excessive cost.
Grants for electric vehicle chargers at home have seen the biggest take-up in urban areas, where car ownership and annual mileage – and thus potential carbon savings per euro spent – are lowest.
Carbon taxes and charges in Ireland, as in many EU countries, have been around €50/t of emissions avoided, higher than elsewhere but still too low, according to climate activists, who would urge an early increase to €100
Finally, Minister for Transport Eamon Ryan has announced a €10m scheme to electrify the bus fleet in the town of Athlone. All 11 buses will be battery-powered and emissions savings will be 400,000kg per annum. Minister Ryan has also committed to a cut of 50% in overall emissions from the transport sector by 2030.
National Transport Authority CEO Anne Graham said the launch of electric buses in Athlone represents a “very significant milestone on the journey to a zero-emissions fleet for our town and city bus services.”
Carbon taxes and charges in Ireland, as in many EU countries, have been around €50/t of emissions avoided, higher than elsewhere but still too low, according to climate activists, who would urge an early increase to €100.
Taking the higher figure, the value of the emissions reduction in Athlone will be 400t at €100/t, or €40,000 per annum, a tiny return on the reported €10m cost.
To be fair to the minister, this is a pilot project, but the point is a simple one – there are some cheap and expensive ways to attain whatever target is chosen and each scheme needs to pass a cost/benefit test.
The task of climate policy is not just to cut planetary emissions, it is to identify the low-cost path to net zero.