Mr. Kevin Meaney:

As well as projects delivering financial costs and benefits, they also deliver environmental costs and benefits, and it is essential that these are considered fully when appraising project proposals. Delivering on a sustainable and climate-friendly NDP is key to achieving our climate action targets as set out in the climate action plan, particularly to halve greenhouse gas emissions by 2030 and achieve net zero by 2050.

New capital investment and new infrastructure is required to keep pace with and provide for the needs of society. The achievement of climate targets would not be aided by a failure to provide for the infrastructure needs of a growing population. However, it is important to recognise that public investments made today may lock in emissions for many decades to come. These emissions cannot be disregarded. The new infrastructure guidelines therefore have an increased emphasis on climate change and consideration of climate and environmental issues. Under the infrastructure guidelines, climate and environmental performance is now an explicit appraisal element at preliminary business case stage. This climate assessment includes the assessed impact of the listed options on greenhouse gas emissions and the project’s resilience to the impacts of climate change, with a view to influencing the decision on the preferred option.

Under the infrastructure guidelines, as part of the economic appraisal, public sector bodies are required to estimate the impact, positive or negative, that a project or proposal may have on greenhouse gas emissions. This is done using the shadow price of carbon. The economic appraisal is a tool to inform decision-makers on the whole-of-society costs and benefits of a project, including climate considerations. This ensures the costs or benefits to society that arise from such emissions changes are fully considered.

To reflect the increase in Ireland’s national climate targets, the shadow price of carbon has been increased as part of these updates to the infrastructure guidelines. The shadow prices will be kept under review as compliance with our carbon budgets and progress towards our net zero target become more evident.

It is worth reiterating that improving our economic appraisal tools does not determine policy choices but better informs them. An accurate shadow price of carbon ensures the cost of emissions is properly considered when evaluating which projects are of overall benefit to society and can prompt lower carbon design choices. With the introduction of the infrastructure guidelines, the appraisal framework is in place for project managers and the Government to make decisions on infrastructure projects, fully informed of their economic, societal and environmental value.

I hope this has provided a helpful summary of the changes we made recently to the infrastructure guidelines. I look forward to discussing these in further detail and answering any questions the committee members may have.