Mr. Owen Wilson:

I thank the Chairman and the committee for inviting representatives of the association to attend, address and give evidence to the committee. The Electricity Association of Ireland represents the electricity industry and its operators within the single electricity market. We account for some 90% of the generation and supply businesses and all of the distribution on the island of Ireland.

As members are fully aware, the Government is accountable for greenhouse gas emissions from the sectors of the economy covered by the effort sharing decision - that is, those not addressed within the emissions trading scheme, ETS, which are essentially buildings, transport and agriculture. On the other hand, the electricity sector makes up the bulk of the ETS where companies are individually accountable for their emissions at EU level and where severe penalties apply.

As members are also aware, Ireland, along with Denmark and Luxembourg, has the most stretching national greenhouse gas reduction target for 2020 under the effort sharing decision, a nominal reduction of 20% on 2005 emissions. In real terms, however, Ireland is in a unique position due to the particular contribution of agriculture in the Irish economy. It represents 44% of greenhouse gas emissions versus 16% for the EU average. Assuming agricultural emissions at best stay constant, which is the best case scenario from the EPA, then Ireland de facto must deliver at least a 33% reduction from the building and transport sectors and through the purchase of credits. It is in these areas, the building and transport sectors, that electricity has a major role to play.

The European Commission roadmap on a low carbon future, the energy roadmap, the NESC report and numerous other studies into this highlight that the most cost-effective means to deliver savings is to decarbonise electricity and electrify the heating and transport sectors of the economy.

In terms of its climate targets and additionally in relation to the RES targets, Ireland, willingly or otherwise, is placed in the role of a pioneer in Europe in that where we are today in terms of climate and RES targets, other member states will reach in ten or more years. In that context, we get to hit the road blocks first. How we deal with them will have an important critical impact on our future economy, both the current mainstream and the future green economies. In this pioneering role, the association believes that we need as a country to do three things. First, we need to identify, analyse and dissolve the current and future road blocks. To date these relate mainly to a severe lack of coherence between various policy instruments. Second, we need to monitor the implementation of existing, revised and new approaches so as to avoid unforeseen consequences. Third, we need to promote our pilot status to EU installations so that the solutions we devise can be mainstreamed into European Union policy, which is where the source of many of today's difficulties arise. In this context, we welcome the current draft Bill as a useful point of departure and within it the creation of an expert body with the potential to lead and drive a fully co-ordinated response to climate change.