Government’s announcement in Budget 2024 of plans to establish a €14bn infrastructure, climate and nature fund could see public investment in projects aiming to improve water quality, reduce greenhouse gas emissions or boost biodiversity.
The draft bill, which seeks to establish the fund, has been published and the joint Oirechtas committee on finance discussed the plans last week.
Senior Department of Finance official Pat Leahy gave the example of “nature-based solutions for water quality” and forestry to reduce emissions as examples of the projects which could be paid for through the fund over the coming years.
It is proposed that capital funding would be mobilised if a Government department makes the case for a project within its remit and the investment plans will deliver an improvement for the environment.
All three ministers in the Department of Agriculture told the Irish Farmers Journal that farmers have a strong case for claiming some of the investment planned to be mobilised from 2026 onwards.
A framework will be needed to ensure that projects which receive the fund’s backing to address an environmental challenge does not lead to negative trade-offs on other elements of climate or nature.
The committee raised the legacy biodiversity, emissions and water quality problems associated with spruce forestry on peats as an area where these unforeseen consequences are witnessed currently.
“If you have a system where it is actually in a capital project or investment that isn’t achieving [climate and nature benefits], it won’t actually meet the criteria, so that will be a framework that will have to be put in place as the legislation is going through,” explained senior finance department official Oliver Gilvarry.
The committee also heard that the fund will not be used to pay subsidies, but only for “projects where there is a capital aspect to it”.
Other Department officials clarified that the fund should not be used to buy carbon credits outside of the State to meet obligations under EU emissions reduction targets, as has been the case in recent years.
Government is targeting €2bn in contributions from national exchequer funds each year up to 2030.
However, the draft bill set to establish the fund would allow for these contributions to be reduced if public finances or the wider economy faced difficulties.
The National Treasury Management Agency is set to manage the fund.