Business

Monday 16 September 2019

Richard Curran: 'The political temperature is set to rise on climate change'

On the march: Many would probably agree with the Extinction Rebellion protesters that climate change is a serious problem – but it gets trickier when it really hits people in the pocket
On the march: Many would probably agree with the Extinction Rebellion protesters that climate change is a serious problem – but it gets trickier when it really hits people in the pocket
Richard Curran

Richard Curran

People stuck in traffic in Dublin city centre last Friday would have had plenty of time to think about climate change. Protesters who are part of Extinction Rebellion held a protest on O'Connell Bridge.

Many inconvenienced by traffic delays would probably agree with the protesters that climate change is a serious problem and is most likely heading towards a very real emergency. But nobody has really worked out who should pay the price of tackling the issues involved. Of course the sensible thing to say is that everybody has a part to play and we should all shoulder the cost together etc.

But when it gets down to the nitty gritty, how should that be carved up? Once policies get specific, things get dirty. Four years ago then environment minister Alan Kelly announced a nationwide ban on smokeless coal. Two ministers later and it still hasn't happened.

Coal companies are threatening to sue, while firms that spent millions preparing and investing for a smokeless future are deeply annoyed. Practice is always more messy than theory.

The first obvious group to pay for funding change are consumers. The second are taxpayers - the same as consumers, but the difference is in how the cost is borne. The third is business.

People will do a certain amount of voting with their feet when it comes to what they buy, how it is packaged and the reputation of the company selling it.

The environmentally aware might be happy to pay an extra couple of cent on their macchiato because they feel good about using recyclable cups.

But when it comes to legislation that tackles climate change in a way that really hits their pocket, things get a little bit more tricky.

The recent cross-party Oireachtas Climate Action Plan came up with 40 recommendations to tackle climate change. It inadvertently highlighted how little has been done and how difficult it will be to make progress.

It recommended scaling up renewable energy, something echoed by Environment Minister Richard Bruton in recent weeks. It also wants to see greater retrofitting of hundreds of thousands of homes; bringing down agricultural emissions and greater community involvement.

Take retrofitting, for example. The suggestion is that people would be able to avail of low-cost loans. It can't be made compulsory. Landlords would expect the financial benefits to be very generous or they might not do it. Legislate to make them do it and we will say it is impacting on rents and that landlords are quitting the business, thereby affecting the housing crisis.

Take agricultural emissions. Agriculture and food advisory group Teagasc, had the courage to come out and say what needed to be said in recent weeks. Dairy farming accounts for 44pc of agricultural emissions. The bulk of the cost of adjustment will have to be borne by the dairy sector.

Teagasc came up with a set of recommendations to reduce CO2 emissions but, in reality, the Government strategy of growing the national herd to massively increase dairy production is not compatible with reducing emissions in the sector.

The IFA went into a sort of denial mode where it questioned the methodology applied in determining net emissions from the sector. Dairy farmers have spent and borrowed large sums expanding their operations fulfilling a Government policy. They have even got lots of State financial assistance along the way. A government U-turn on our food industry policy would be very hard for them to swallow.

Take renewable energy. The minister is now just beginning to talk about offshore wind as a possibility when the necessity of moving to this has been obvious for years. The problem is that thousands living along the Dublin coast want renewables generated on Donegal hillsides, but don't want to look out at turbines off Dalkey Bay.

Solar is also mentioned as a future renewable source. Yet for years the State has failed to capitalise on its potential with suitable supports. It has put all of its renewable eggs in the onshore wind basket and communities in some areas say they have had enough, and have done their bit.

Everywhere the Government turns on these issues, there are politically explosive landmines.

The same political pressures are playing out elsewhere. Elections in Finland earlier this month saw the right-wing Finns Party almost tie for first place with the Social Democrats. The Finns Party played not just the immigration card but also climate change as a populist strategy. Its stance on environmental policies, which includes opposing a proposed tax on meat consumption, appeals to rural voters in particular. They are unhappy about rising carbon taxes which hike the cost of fuel.

The party is the only group in Finland - a country that has the highest air quality in the world - to argue the next government should not speed up cutting carbon emissions.

The Oireachtas committee plan on climate change looked at carbon taxes, albeit in the distant future. It recommended jacking up carbon taxes from €20 per tonne to €80 per tonne by 2030.

As long as people see it as an abstract policy, they'll say it's an idea they would back. But when it means more expensive home heating oil, coal or briquettes, many will feel differently about it. If the cost of living for consumers goes up to fund climate change initiatives, the friendly participant in an opinion poll, might decide to vote differently when it comes to polls of a different kind - namely elections.

Taxation is one way of funding climate change initiatives. But here too politicians have to be very careful about how they manage the transition.

The Green Party is still getting roasted for cutting motor tax on diesel cars only to have it tick up since then.

Given the growing awareness of climate change among the public and the apparent desire to tackle it, how come the Green Party is still showing at just 5pc in opinion polls?

To some extent it has to be the public's theoretical interest in climate issues but failure to accept the cost to them of cleaning it all up. Political parties in Ireland are playing a game of chicken when it comes to climate change. It is one of the reasons why the country has been such a laggard when it comes to meaningful responses.

The best way to get painful change through for a government is to have cross-party support. Fine Gael doesn't want to get ambushed by Fianna Fáil or Sinn Féin at election time on a particular climate change policy.

Cross-party consensus was almost reached on the Oireachtas committee report, with Sinn Féin and People Before Profit not supporting all of the recommendations.

The document is somewhat vague. It has lots of good ideas but no real implementation plan. That job will fall to Mr Bruton in the coming weeks as he is due to publish his plan for tackling climate change.

One obvious strategy would be to make business pay. It might play well with the public but not with businesses themselves or our ability to attract foreign direct investment.

Large multinationals like making grand environmental gestures of their choosing, such as buying wind farms, but don't like legislative and taxation environments they see as undermining their competitiveness and profits.

Smaller businesses already feel burdened with regulation and red tape and will hit back if they believe they are shouldering too much of the cost.

Mr Bruton is seen as a steady experienced operator who won't do anything rash. Not doing anything rash may mean a recipe for actually doing very little at all.

After all, how can you sell the real cost of climate change initiatives to the public in Ireland, when the President of the US appears to be in denial about the phenomenon in the first place?

Why should I pay more for everything when the biggest polluter in the world isn't interested?

But the EU is waving a big stick of massive fines if we keep failing on this issue. Brexit isn't the only political balancing act facing the Government right now.

Indo Business

Also in Business