Dr. Rory O'Donnell:

I think the Cathaoirleach. The secretariat of the National Economic and Social Council is extremely grateful to the committee for the attention it is giving our work and for inviting us to discuss it today. In late 2011, the secretariat of the NESC was asked by the Government to prepare two reports on climate change: an interim report on policy options which could close the gap to Ireland's non-emissions trading scheme, ETS, emissions in the compliance period to 2020, and a final report for the end of this year to develop the basis for the long-term transition to a low carbon economy incorporating the key messages of our first report. These two papers will be part of the Government's programme or road map for the development of a national climate change policy and legislation.

The work of the NESC secretariat over several decades has been to provide background analysis which frames the development of policy rather than making specific recommendations, which is primarily the work of Departments. In addressing the framing of this issue, it is very striking the dominant framing of climate change has focused on seeking a binding global pact on targets and timetables; emissions trading as a central policy instrument; a particular model of the relationship between science and policy; and what we call an information deficit view of the many behavioural and attitudinal issues which everyone recognises are central.

In embarking on this work our secretariat tended to share the assumptions which underpin this dominant set of ideas. However, undertaking the work has forced us to think more critically about these elements. This dominant approach has at times led to a highly dualist and divisive policy debate at international and national level and it has not achieved its central goal. We believe, as we outline in the report, that a significant reframing of the climate change challenge is necessary and is already under way in international policy and thinking. In identifying the pressures on the dominant framing we highlight the challenge which continually confronts the task of achieving global agreement. We suggest we need to take a realistic and fairly hard-headed view of the ability of carbon pricing, emissions trading and existing technologies to address global warming. We suggest organisational capability in firms and State organisations and the rule of consumer demand are often overlooked in the discussion on climate change which tends to reflect the emphasis in the discussion on the actions of states. We suggest it is necessary to move beyond the information deficit view of behaviour change and get deeper into the practices and obstacles which can make it difficult or easy for households, firms, civil society organisations and public authorities to reduce their carbon production or carbon consumption.

Our interim report also highlights the strengths and limits of the very heavy emphasis on targets and timetables which tends to dominate the politics and policy of climate change. More than anything else perhaps, our interim report suggests the balance of attention needs to shift from how much emissions reduction to aim for to how to achieve decarbonisation. Building on this framework our interim report contains detailed chapters on Ireland's existing policy, sectoral profiles and challenges in the areas of energy efficiency, transport, agriculture and land use, which relates to the question the Chairman asked, carbon tax and the possibility of purchasing credits.

Drawing together our analysis of these various sectors and challenges we argue that in formulating a new climate change strategy Ireland needs to keep three precepts in view at the same time. The first is economic prosperity. Actions on carbon must be consistent with economic recovery, employment, fiscal correction and longer-term prosperity. The second is decarbonisation. The goal is gradual, permanent, widespread decarbonisation of the economy rather than compliance with specific targets and timetables. The third is time. Many of the actions, technologies and practices which can achieve decarbonisation take considerable time to make themselves felt. This suggests Ireland is confronting very severe challenges and some opportunities. In current conditions cost-effective actions for CO2 reductions on a predictable timescale in areas such as energy efficiency, transport, renewables and agriculture face significant constraints in policy design, human resources in the public system, public finance, the limited availability of credit in the private sector and the widespread deleveraging in the household and business sectors. At the same time it is equally true that some of the measures, particularly energy efficiency measures, for addressing climate change can promote recovery and employment in the coming years. Many of the measures we want to take mesh with long-term economic development.

Overall we suggest a pragmatic approach with action on three tracks simultaneously. Track one is to design and implement measures which makes sense and are feasible in the coming years on energy efficiency, taxation, transport and agriculture. Track two, which we label "explore and experiment", is to use organisational networks to test and scale policy possibilities in a range of areas such as electrification of heating and transport, the smart grid, biomass, transport and agriculture. This track reflects our finding that action on climate change usually occurs when the ball is given to an agency or organisation which has the ability to run with it.

Examples include the Sustainable Energy Authority of Ireland, SEAI, in energy efficiency, the ESB in electric vehicles, Bord na Móna in biomass and many others.

The third track is strategic and institutional and is concerned with framing and developing Ireland's strategic approach in three areas. First, what institutional design and process for policy analysis, policy decision and policy development is necessary? In our final chapter we suggest that, in considering institutional issues, it is important to address a number of aspects, not all of which have received sufficient attention in the debates to date, for example, the need to achieve an effective combination of high level central government decision making with effective front-line action in the types of agency to which I have referred; the need to achieve a stronger link or links between Ireland's out-facing carbon accounting, in which we have established a reputation, and our in-facing government and societal project of addressing climate change and decarbonisation; and the challenge of finding an agenda combining green enterprise, employment recovery and green growth that motivates policy and political and societal actors rather than climate or emissions reductions alone.

Second is the challenge of framing Ireland's engagement with the EU. This should include the purchase of credits internationally if that proves necessary. Ireland must have a role as an advocate of reform of the EU climate policy process so that it might be richer in policy review and mutual learning.

Third, we are addressing a challenge in our second report for the end of this year, namely, finding an Irish logic and motivation for a low-carbon economy, including the possibility that Ireland could be a global leader in the agricultural and food aspects of climate change.

These three tracks are summarised in a short handout that we will supply to the committee. It sets out our framework for considering the institutional challenge facing our system. On this basis, we are happy to answer the committee's questions to the best of our abilities.