Mr. Mauro Petriccione:

I thank the members for the questions. I will start with just transition, the common thread among the questions. First, I return to the issue that our current economic model is being challenged in any event by a number of mega trends. Climate change is perhaps the most urgent because of its disruptive nature on our entire planet and society, but if we limit ourselves to our economic fabric, digitisation, automation, artificial intelligence, the development of three dimensional, 3D, printing and the competitive rise of other economies in the world are all imposing pressure and, by and large, and I am not saying this is a precise view, the sectors and areas that are under pressure are always the same. The question of just transition grafts itself onto the bigger issue of accompanying the changes in our economy in a fair and equitable manner. There are some instruments in Europe at European and national levels. We have made good use of them but we could always do with more and better. I do not wish to sing the praises of the policies we have and claim they are sufficient to resolve the problem. The only claim I am making is that this is an additional facet and adds pressure to areas, sectors and people which are already under pressure and towards whom we already have an obligation to act and solve the problem. That might facilitate the issue in some ways because we can use some of the instruments we already have.

The second point is that one of the issues with which we have traditionally struggled has been what the transition should be towards. The problem has often been not so much finding the resources to ease the exit of workers from a certain sector in a certain area but to provide them with viable, long-term, stable and sustainable alternatives. It has often been not so much what we do in the immediate term but what we should do it for in the longer term. The economic development we see as a consequence of the climate transformation is at least capable of facilitating this, although I am not offering certainties here.

On the question of how to convert workers in areas of traditional agricultural production that need to adapt or in the peatland the two Deputies mentioned, one of the assumptions we made in our analysis is that a very important component of the transition will have to be development of the use of biomass. To be usable for a climate transition, biomass must be accompanied by technology such as carbon sequestration, but we must also think of where the biomass comes from. We do not wish to import massive deforestation from abroad or to alter our carbon sink, but if one looks at our analysis, there is plenty of space in Europe by improving agricultural practices, improving forest management practices, converting what is currently economically marginal agricultural land to the production of biomass and bringing back into production some of the land that was set aside in the past to reduce our agricultural surpluses.

There are objective reasons to believe that, well-managed, we could double our production of biomass and make that into a very important component of the transformation. That will happen, by and large, in many of these challenged rural areas. The instruments for a transition are available under the Common Agricultural Policy, the Cohesion Fund and the European Social Fund. I will not pretend that these funds alone are sufficient to solve all the problems of this type that we will have in Europe, but members of the committee know that Ireland has been an important and effective user of these funds and that they can be used to very good purpose. They can be matched by national funds. If planned, this is one of the instruments we can use to ease the transition.

On the question of peat as a fuel, the Deputy's question also poses a longer-term challenge. Aside from the climate transition, that production is only there because it is subsidised. We all know that at some point in the longer term the pressure to stop the subsidisation will grow. In any event we need to find alternatives to ease transition. A similar problem arises with coal production in a number of member states. Some member states have already implemented measures. I have in mind the Spanish Government and the measure it has taken to ease the exit from coal in terms of closing the publicly owned mines. That has been accompanied by an important social package, supported by national and European resources. The situation is more difficult for other member states such as Poland and Germany. Other countries such as Slovakia are also exiting coal through the same or similar mechanisms of support.

To summarise, just transition is essential.

A transition which is perceived as being unjust or as adding unduly to pressure that people in some sectors or areas already feel has very little chance of succeeding and receiving political support. We do have the instruments to accompany those transitions. The climate transition does not in itself create the problem of transition alone. It is a problem we already have and which we already need to solve. It might direct us towards a longer-term, more viable and more sustainable solution than might otherwise be the case. We do not see it as an easy challenge; we see it as a very serious issue that is inevitable with or without the climate transition.

On economic opportunities, it is very difficult to express without falling into one extreme or the other, but it is a climate action strategy. Its objective is to stop climate change, first by enabling Europe to do its part and second, by Europe offering a successful model for others to follow to solve a global problem. Since this requires a deep transformation of the economy, we think it is impossible to affect this transformation by stopping segments of our economy. By definition, the only viable climate strategy is one that transforms our economy into an equally functioning economy but one that is decarbonised and clean. When I refer to the counterfactual, which I know reasonably well having spent 30 years of my career in trade policy, the kind of economy that we are trying to describe in the long-term strategy is one that is probably going to be more advantageous to us and a better economy than the one we have today, which is not to be taken for granted. Maintaining our economy today will be very expensive in the next years and decades. That money could be wasted because climate change and the lack of resilience of this economic model could destroy all the efforts we would make in maintaining it.

On the European Parliament's resolution, there is a debate on the nature of the trajectory between now and 2050. If one thinks in terms of linear development, then yes, the minus 40% to which we have committed and the minus 45% which we will achieve on the basis of our current legislation, if properly implemented, is not sufficient. It needs to go in the region of minus 55%. On the other hand - and I am sure the committee has had plenty of experience on this - policy developments are rarely linear over the long term. They are much more likely to be based on a progression where policies are started as one can and further developed and accelerated. If one looks at European climate policy, which we started only after 1990, between 1990 and 2017 we reduced our emission by 22% while increasing our GDP by 58%. The 2030 legislation will bring us to reducing emissions by another 23% in 13 years, between 2018 and 2030. That means basically doubling the rate of change. That will not be sufficient but it shows that one can accelerate a policy change and in fact, there are arguments to say that if we had tried in 1990 to set the kind of target that would bring us in a linear fashion to where we are today, we would have failed. The Commission's perspective is from a pragmatic policy approach. The 2030 legislation is what it is. It is what could meet the consensus among member states and the European Parliament. It is already transformative. Take the example of passenger cars: a 37% reduction between now and 2030 is capable - I have no guarantee that it will do so - of triggering a transformation that will make further standards unnecessary because if manufacturers are pushed to put sufficient numbers of electric models on the roads at prices comparable to combustion vehicles, the market is ready to absorb it. This involves us doing our part in financing the necessary infrastructure for charging, for instance. If that does not happen and those standards are not sufficient, we will have to legislate new and stricter standards for post 2030. The Parliament resolution is based on one assumption, which is that policy is developed exclusively in a linear fashion. That is certainly not true. Whether linear development or a progression is the best is an open question - there is a debate on that - but it is certainly not true that policies can only be done in a linear fashion.

Finally, the issue of sectoral targets is another debate. Our judgment has been that sectoral targets at European level are very unlikely to be the basis for a consensus and that it would have been very difficult to operate them effectively at European level. That does not mean that they cannot be set and operated at national level. Some member states have experimented with that, some more successfully than others. There is no perfect, or even good recipe, on sectoral targets. In the same spirit, with the effort-sharing decision and now the effort-sharing regulation, we have experimented with a combination of a European-wide target and national targets. The one thing I would add is that at European level - and several member states, including Ireland now, have made the same choice - it has been decided that planning is the tool to translate overall mandatory targets into specific policies and measures. Hence the governance regulation and the obligation for all member states to equip themselves with a national energy and climate plan. Some member states have gone further. One reason I am looking forward to seeing the Irish Government's whole-of-government approach, as announced, is because from the description, it could go further in its precision and reach over the plans in the governance regulation. My own country has successfully experimented with allocating the national targets on a regional basis and involving the regional institutions, governments and parliaments in the planning. It has worked extremely well for the 2020 targets and it is repeating the experiment for the 2030 target. For us, what is important is that as a member state, we have created a European framework that encourages better planning. We see that there is a take-up of this by member states which often goes further than the minimum European standard. We think that is a very good thing and that it will be a very useful instrument for the future.