Oireachtas Joint and Select Committees

Wednesday, 28 February 2024

Committee on Budgetary Oversight

Impact of Climate on Public Finances: Irish Fiscal Advisory Council

Professor Michael McMahon:

No. That is a good guess. I definitely will not claim any expertise in the world of agriculture. An umbrella answer to what the Leas-Chathaoirleach said at the end about the role of planning, which I will continue to stress, is that it is not just planning in one area; it is joined-up thinking. As the Leas-Chathaoirleach noted, regarding the national development plan or extra investments in climate, it may be absolutely fine to wait until 2026 to tap into those funds as long as we keep going with other planned investments in this area. As I said earlier in response to Deputy Conway-Walsh, perhaps prioritising those that will have the biggest climate impact. As the Leas-Chathaoirleach pointed out, there are many other things that are not necessarily financial that can help us along the way. That would be - and I referred to this in my response to Deputy Durkan - providing some certainty to the agrifood sector about what the world will look like as we engage in this transition that is coming, how we expect it versus the State to bear some of the costs and what incentives there will be for it to move faster and to put in drainage or to make assessments, together with the Department for the environment, about the necessary steps. I will not claim any expertise on one system versus another but there are experts who can provide this guidance.

I like the way the Leas Chathaoirleach put it. Planning is necessary but I stress it is not just piecemeal planning, one dimension at a time, it is planning together in a joined up way and potentially having to be flexible. If it turns out that there is more capacity for retrofitting, perhaps we need to unleash more funds from even the normal capital spending budget to do that, or, if we find ourselves in a position in which the construction sector is much more constrained, are there other types of investment we can engage in now? For instance, if we want to move down the road of full electrification of rail networks or other transport industry, is now a better time to make those investments? A lot of those investments, at least the major capital parts, are not made in Ireland. In theory, you can invest from abroad, beyond the installation and maintenance, without adding to pressures in the domestic construction sector. Perhaps now is a better time to do that because in five years, everybody will be scrambling to do this. At that point, those industries may have capacity constraints. It points to a plan being a key part but it must be a joined-up plan that includes all of these things and provides some level of certainty in a very uncertain world. You cannot provide full certainty but you can at least provide some sense that investing in retrofitting your house now will not disadvantage you financially compared with waiting until 2028 because that is when we know the government of the day will be desperately trying to get more of this done and provide better incentives. Planning now can help in that respect. Mr. Carroll or Mr. Conroy may wish to add something.

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