Comment on Budget 2008 and Carbon Budget

The following comment piece by Friends of the Earth Director, Oisin Coghlan, appeared in the Irish Times on Friday 7th December.

Read our pre-budget briefing here.

This week has seen a significant symbolic shift in Irish climate change policy, moving it to the heart of political decision making. For the first time in the financial Budget, the Minister for Finance laid out Ireland's pollution performance alongside our economic performance, benchmarking our progress against our international commitments in the Kyoto Protocol. Then, yesterday, the Minister for the Environment laid out Ireland's first ever Carbon Budget, something Friends of the Earth has been calling for.

Like the traditional Budget the Carbon Budget is an exercise in accountability and planning. Minister Gormley outlined the latest emissions figures for each sector of the economy, the measures planned to reduce emissions and how the projected outcome compares with Ireland's Kyoto target and the Government's commitment to reducing pollution by 3% a year on average.

The format is by no means perfect. Friends of the Earth believes the Carbon Budget should start with the amount of pollution we're allowed under Kyoto, then allocate that between each sector for the period ahead and go on to detail adequate policies to keep emissions to those levels. It must become more than a list of measures and their hoped for impact, it must become the ceiling on our future emissions. The Minister said in his speech he is open to improvements and I hope he will take this on board.

On the substance, the two budgets leave much to be done. The concrete measures announced amount to one small step towards sustainability, but they are not yet the giant leap we need.

The changes to VRT and Motor Tax are progressive and welcome. From next July new cars will taxed solely according to how polluting they are. Cars will be clearly labelled A to G, just like fridges are now, depending on their carbon emissions. The more polluting the car you buy, the more you pay. It is simple, fair and clear. Importantly, the VRT on low-emission cars will actually be less than it is now, demonstrating that environmental tax reform is not about raising more revenue for government, but rather about sending a clear price signal to people that less-polluting choices will be rewarded.

If the Government is serious about reducing emissions by 3% a year then we need the same kind of carrot-and-stick price incentives across the whole economy. Minister Cowen announced that a Commission on Taxation would begin work in the new year. Unfortunately he didn't say when it would make recommendations and when he would act on them. This is the crucial piece of the jigsaw. The Kyoto clock starts ticking in January. For the next five years every tonne of emissions above our Kyoto target will cost the taxpayer money. The Government has already put aside €290 million in a Carbon Fund to buy extra pollution permits overseas. This amounts to a stealth tax on PAYE workers who contribute to the fund no matter how much they do to reduce their own pollution. Putting a clear price on carbon would cut emissions, reduce the amount we need to spend overseas, and make the polluter pay for whatever permits we do need to buy. The Budget in 12 months time simply must introduce a carbon tax or some other form of carbon pricing.

On the spending side, the doubling of resources for energy research is welcome, particularly the emphasis on ocean energy. If Ireland had taken a similarly forward-looking attitude to wind energy 25 years ago we could be a world leader in wind now, rather than playing catch-up as we are. Similarly, Ireland has huge potential for wave and tidal energy. If we invest ambitiously we can be exporting our surplus electricity in years to come. This budget is a step along that path.

On the other hand, the €5 million for a pilot programme of home insulation is nowhere near enough. One third of Ireland's housing stock has been built in the last 10 years, to inadequate energy efficiency standards. This was a serious missed opportunity. Putting it right will require a retro-fitting programme on the scale of the conversion of Dublin to natural gas in the 1980s, nationwide.

Investment in transport is still badly skewed towards roads. Minister Gormley revealed yesterday that transport emissions have risen by 170% since 1990, when our Kyoto commitment is to limit overall emissions to a rise of just 13%. To tackle this we need a Marshall plan for public transport. We know that when public transport is convenient, reliable and reasonably priced people flock to it. Instead almost two-thirds of spending on transport infrastructure next year will still go to roads, with just over one-third going to public transport. In countries that have reduced transport emissions the proportions are the reverse.

The new Government has now delivered two of the three things Friends of the Earth and the wider Stop Climate Chaos coalition have been campaigning for to start reducing Ireland's climate pollution. The Carbon Budget and the commitment to reducing emissions by 3% a year. The missing ingredient is an Act of the Oireachtas to give these commitments the force of law. Only a law will make sure Ireland does its fair share to prevent runaway climate change. If such a law had been in place it would have not taken seven years to introduce the reform of VRT and Motor Tax now finally being implemented. It would not have taken so long to bring the building regulations into the 21st century. A climate law would drive the innovation we need in public policy, private enterprise and personal behaviour.

Yesterday, while Minister Gormley was delivering his Carbon Budget, Stop Climate Chaos presented the Taoiseach with a Call to Action, including support for a law, signed by 22,847 members of the public and 77 TDs, including many government backbenchers. Debate on just such a law will resume in the Seanad before Christmas, where Senator Ivana Bacik has introduced a Climate Protection Bill. There would be no better way for the Government to demonstrate that this week's focus on climate change was not just a flash in the pan than to let that Bill proceed to committee where all parties could work on agreeing it. The Government is committed to all-party agreement on climate policy. There can be no higher expression of such agreement than an Act of the Oireachtas.

Before that debate John Gormley heads to Bali where world leaders are meeting to begin negotiations on the next global treaty on climate change. Everyone acknowledges that Kyoto is just a modest first step. The challenge ahead is much greater. Around the world tomorrow people will march to press our politicians to rise to that challenge. In Ireland church bells will ring across the country at 2pm to sound the alarm and in Dublin a parade for the planet will go from the Civic Offices on Wood Quay to the Custom House.

If the Government is serious about honouring its commitments on climate then this week was just a curtain-raiser. We need to see the main act in the year ahead.