Ireland can build a low-carbon economy with clear tax and investment goals

27 May 2019

Image: Ibec

Business and government urged to embrace a once-in-a-lifetime chance to build a better world.

Business group Ibec has called for Ireland to build a low-carbon economy underpinned by a sustainable enterprise base, energy resilience and a high quality of life.

Decarbonisation should occur in phases to ensure a smooth transition, according to a new report ‘Building a low-carbon economy: A roadmap for a sustainable Ireland in 2050’, which Ibec produced in consultation with member companies and the Science Foundation Ireland MaREI Centre’s energy policy and modelling team at University College Cork.

‘Ireland must take decisive action to decouple emissions from population and economic growth, and build the foundations of a sustainable, competitive, low-carbon economy’

The report notes a number of policy goals, including an upward carbon tax with gradual predictable increases. The tax should be set at €30 per tonne in 2020 and increase by €5 per tonne annually until it reaches €80 in 2030. The revenue should be ringfenced to support low-carbon investment.

It also calls for the introduction of short-term carbon budgets for sectors, establishing a national social dialogue on climate action, a review of the security of energy supply out to 2035 and support for private investment.

On the latter point, the report suggests that the Government offer supports and incentives to help businesses and households to overcome high upfront capital costs. A transition will require in excess of €40bn of new capital investment by 2030, most of it through private investment.

Our biggest threat and an opportunity

Man in dark suit with blue shirt and navy tie.

Danny McCoy. Image: Ibec

“Climate change is the single greatest challenge faced by humankind today,” said Ibec CEO Danny McCoy.

“As part of a wider global response, Ireland needs to play its part by taking decisive action to decouple emissions from population and economic growth, and to transition to a competitive, low-carbon economy.

“For Irish business, such a transition presents a no-regrets opportunity to build a better Ireland. If we focus on smart, cost-effective and evidence-based policies, we can use the transition to enhance our energy security, boost competitiveness, improve quality of life and create thousands of sustainable jobs across the country,” McCoy said.

How businesses can begin building a low-carbon economy

Responding to questions from, Conor Minogue, senior executive at Ibec responsible for infrastructure, energy and environment, and author of the report, said that if businesses want to start on the road to a low-carbon economy, they should begin by contacting the Sustainable Energy Authority of Ireland (SEAI).

“The SEAI has a suite of supports and advisory services which they can tailor to the particular needs of a business. They have worked with thousands of businesses across the country for over 15 years and are best placed to give guidance on energy efficiency and decarbonisation.”

Another practical step would be to contact your energy supplier.

“Under the Energy Efficiency Obligation Scheme (EEOS), all energy suppliers have an obligation to support households and businesses achieve energy savings. Support can be technical and financial, and could include a direct monetary contribution towards a project, low interest loans, discounts on materials and/or reduced energy prices or tariffs. Areas covered include lighting, heating, refrigeration, compressed air, transport and industrial processes.”

Minogue also recommended that firms enquire about the SEAI’s Support Scheme for Renewable Heat (SSRH).

“The SSRH is a Government-funded scheme and supports the adoption of renewable heating systems by commercial, industrial, agricultural, district heating, public sector and other non-domestic heat users. The scheme has two elements: an installation grant for electric heat pumps, and an operational support tariff for biomass and biogas (anaerobic digestion) heating units. The installation grant is already open to business. The operational support tariff will open shortly.”

Minogue admitted that up until now, Ireland’s progress on climate action has been very mixed.

“We continue to make considerable progress in removing fossil fuels from our electricity system and Ireland is set to achieve 40pc renewable electricity penetration by 2020. But power generation only accounts for one-fifth of total national emissions. Our transport and heat sectors are still heavily reliant on fossil fuels. Furthermore, greenhouse gas (GHG) emissions from Irish agriculture have increased in the last few years. Total Irish GHG emissions have increased by 5pc since the recovery of our economy in 2013.

“We appear to be deviating ever further from the trajectory needed to meet our emissions reduction targets. Ireland must take decisive action to decouple emissions from population and economic growth, and build the foundations of a sustainable, competitive, low-carbon economy.

“The Ibec roadmap sets out a suite of policy measures that, if implemented, will allow Ireland make up for lost ground and put the country on the right pathway to meeting its targets.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years