Monday 21 October 2019

Caroline O'Doherty: 'Climate's place in 'green Budget' feels more like a cameo than a starring role'

More work required: Climate Action Minister Richard Bruton. Photo: Collins
More work required: Climate Action Minister Richard Bruton. Photo: Collins

Caroline O'Doherty

IN HIS Budget speech, Paschal Donohoe declared climate change the "defining challenge of our generation".

Climate Action Minister Richard Bruton proclaimed it "the first budget where climate is central".

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But when the measures are totted up, the results are less than their prominence suggests and climate's role looks not so much central as cameo.

Carbon tax was the most talked about aspect in the months leading up to the Budget and there was no surprise at the €6 per tonne increase, and little at the decision to hold off on applying it to heating fuels until next May.

But that delay means the extra raised by carbon tax next year will be just €90m, which doesn't even cover the €124m the Department of Climate Action has calculated it could cost to buy our way out of missing next year's EU carbon reduction and energy efficiency targets.

That calculation better not come true because it has already been decided where the €90m will go. The biggest chunk, €31m, goes to the midlands to support communities losing peat-related jobs with Bord na Móna and ESB.

That allocation is important, and not just because it is a central plank of the global climate action movement, a 'just transition' to carbon-free living.

While the workers may not like being guinea pigs for the Irish transition experiment, their experience should help develop a model for other communities that will suffer in the move away from carbon-intensive production.

It's questionable, however, whether we need a 'just transition commissioner' to oversee the process, because it's certain the yet-to-be-finalised salary will exceed that of the average peat worker.

The rest of the €90m is to go on a mishmash of initiatives such as greenways, urban cycle paths, sustainable agriculture and providing extra funding for purchase grants for electric vehicles.

The grants aren't increasing in size but the numbers availing of them are, so having extra money on hand should avoid the problems the deep retrofit scheme ran into recently when its budget could not keep up with demand.

That scheme, and the various other warmer home and energy efficiency schemes, are to be funded to the tune of €146m next year. That's a €29m increase on this year's allocation and carries the target of upgrading 24,000 homes and businesses.

Under the Climate Action Plan, however, we're supposed to have retrofitted 500,000 by 2030, so 24,000 a year for 10 years will fall far short unless annual targets are substantially ramped up or property owners opt to take all the financial pain themselves.

But it's not just on targets this climate action budget is off to a slow start. Much of the pre-Budget discussion around the carbon tax was how the revenue could be recycled or redistributed to guard against fuel poverty, bridge the income inequality gap and provide real alternatives to carbon-intensive living for everyone in society.

The Economic and Social Research Institute and other think-tanks spent a lot of time coming up with sophisticated models for manipulating the finances through the social welfare system, tax system, universal payments and other mechanisms.

The Government has opted for none of those and in fairness next year's modest €90m pot probably doesn't justify it.

But this year's €6 increase is just the start of similar annual hikes between now and 2030 which are expected to generate some €6bn when they reach that point in time.

That's a lot of money with a lot of potential. How future finance ministers handle it could become the defining challenge of their budgets.

Irish Independent

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