Mr. Joseph Curtin:

I thank the Chairman and the committee for the invitation at this important time in national, EU and international climate policy development. I am very happy to be here to represent the Institute of International and European Affairs and University College Cork, UCC, which are my host organisations.

Given the requirement for brevity, I was reminded of Mark Twain's observation, "I didn't have time to write a short letter so I wrote a long one instead". It would be easy to deliver a long presentation because there is much that could be said on this topic, but I have restricted myself to answering five key questions which I hope will be of most interest to the members of the committee. These questions are on slide 1. How fast is climate change happening? Did Ireland get a good deal in this legislative proposal we are discussing today? What would be the implications for the fiscal space of inaction? Is responding to climate change possible given the fiscal constraints of today, and how can we bring citizens with us?

First, in terms of how fast climate change is happening, needless to say, climate change is happening. Human intervention is the main drive; we are mostly agreed on that. The impacts will be severe, pervasive and irreversible. That much is generally accepted. However, there is an unhelpful narrative which tends to present climate change as a problem to be dealt with 50 or 100 years from now, but the impacts are evident now in the world around us. This year, 2016, is on track to shatter the global temperature record. In fact, in an unprecedented streak, as members can see from slide 2, every month for the past 16 months has shattered the previous record for that month. That is alarming even the gloomiest climate scientists, and there are plenty of them.

The negative impacts are already with us in the world around us, whether it be wet winters in Ireland, drought in Syria, forest fires in Canada or rising temperatures across Africa, South America and parts of Asia, which are putting millions of people into food insecurity. One-off events cannot be ascribed to climate change, but these impacts are consistent with model predictions. I discuss that in more detail in the article referred to in slide 3. The world is fast approaching an inflection point where dangerous climate change becomes inevitable. To summarise, climate change is here and now, and so too is responsibility for action. It is not for future generations, nor is it for future Dáileanna.

With regard to the second question as to whether Ireland got a good deal - I am back on topic with this question - the answer is "Yes". Ireland got an excellent deal in the proposal, and it is still only a legislative proposal on the table. This is because first, because Ireland's proposed target is significantly lower than comparable wealthy countries, as members can see from slide 4. That is a recognition of the high cost of reducing emissions in Ireland's agriculture sector. Second, the Commission is proposing to wipe the slate clean after 2020, therefore, Ireland's lack of progress in meeting its 2020 targets, which was just discussed, cannot be carried forward. We will not be punished for that post-2020. Members can see this somewhat bizarre outcome in slide 5. I describe this as the Harry Potter proposal, and members can see why if they look at the slide, where Ireland's 2021 target will be significantly less onerous than its 2020 target.

A third favourable aspect for Ireland is that forestry can be used to offset some emissions, as discussed, and some carbon credits can be purchased from the EU instead of reducing emissions at home. In fact, when these flexibilities are included, Ireland's "real" target is only slightly more demanding in 2030 than it is in 2020, as members can see from the slide. This is a very good deal.

With regard to the third question on the fiscal implications of inaction, when one sets the proposed target against our projected emissions, the scale of the challenge becomes immediately apparent in slide 6. The distance to target, Nos. 1 and 2 in slide 6, and flexibilities, which is No. 3 in slide 6, all imply a cost to the Exchequer. If Ireland took no further action to reduce emissions in the period to 2030, we estimate a cost of between €3 billion and €6 billion. I should stress that in many cases the numbers are subject to considerable uncertainty. However, I have had them checked since by many experts in the field, including a number of officials across Departments. This analysis needs to be refined over time but it provides a good, solid starting point.

I stress that this is a "what if" scenario, not a prediction. Given fiscal rules, billions of euro spent on fines and carbon credits mean less money for schools, hospitals, income tax cuts or other political priorities. The question is whether this would be better spent by creating jobs and investing in the low carbon economy at home. While the deal on the table is a very good outcome from an Irish perspective, there is an immediate imperative to achieve more rapid decarbonisation, particularly in the agriculture, transport and buildings sectors.

That leads to the fourth question: is responding to climate change possible given fiscal constraints? It is sometimes argued that Ireland cannot afford to meet its climate targets. I hope I have convinced the members, from the analysis I have given, that this needs to be turned on its head. I am suggesting that Ireland cannot afford to not meet its climate targets, but that argument never held much water in the first place. This is where we get into slightly more controversial territory. That is because, first, there were billions of euro of investment capital available to the Exchequer but we often chose to invest in locking in carbon rather than reducing it. If we take the Capital Investment Plan 2016 to 2021, €10 billion will be spent on transport, almost two thirds of which will go on roads, including economically and environmentally questionable projects such as the Gort to Tuam motorway, which was inundated in several places in the recent floods and which, ironically, were linked to climate change. Meanwhile, as members can see on slide 8, the National Transport Authority recently announced that several cycling infrastructure projects could not be progressed due to lack of capital.

I understand the capital infrastructure plan is due for review in 2017. Deciding between competing projects always comes down to difficult political choices. Nevertheless, there is a case for much greater climate proofing of infrastructure plans and other expenditure items in light of climate targets.

The second reason I do not believe this lack of resources is a good argument is because, as shown on slide 9, even if there was nothing in the kitty, which I do not believe to be the case, there are numerous ways emissions can be reduced without costing the Exchequer or society a penny.

For example, carbon tax can be increased steadily over time and offset by imposing lower taxes on work or funding energy-efficient investments. This would boost economic growth and employment. Vehicle registration tax and annual car tax could be further adjusted in a revenue-neutral manner. Incentives in the agricultural sector in the post-milk quota era could be realigned to focus on climate-smart agriculture. This would involve a move away from supporting emissions-intensive and loss-making sectors, which are not providing sustainable incomes to farm families in many cases. Fossil fuel subsidies for peat could be used to support renewable resources that are generated and owned locally.

The committee might not agree with some or any of these policy proposals, but I hope it will agree with my central point that it is not fiscal constraints but political choices, which are made in response to the demands of citizens, that are preventing us from responding to climate change. This leads to my final question. How can we bring society and citizens with us? A key challenge is to change the narrative from one exclusively focused on cost to one that considers benefits and opportunities, particularly for rural Ireland. It is necessary and possible to socially and rurally proof low-carbon transition. If we are to socially proof low-carbon transition, we must deal with the negative social impacts of implementing changes to incentives, such as increases in the carbon tax. There are many approaches to this. As I have mentioned, we could support energy-efficiency investments in fuel-poor households. If we are to rural proof low-carbon transition, citizens can and must be incentivised as investors in low-carbon projects in their communities. It must be possible for these projects to generate local incomes and local wealth. I refer to projects in areas like on-shore wind, anaerobic digestion, photovoltaic solar, forestry and energy crops.

Low-carbon transition needs space and land in rural Ireland. Incentives like the renewable heat incentive, which is currently under discussion, and the successor to the feed-in tariff for electricity generation are under consideration. It is vital that they are designed with local communities and citizen investors in mind, as their preferences and needs are different from those of traditional professional investors. The mobilisation of local citizens and communities has been achieved in many countries through targeted policy interventions. For the record, this can be seen on slide 11. I will spare the committee by not going through it. While there is a perception that rural Ireland is threatened by low-carbon transition, I suggest it has the most to benefit. It is possible to have a low-carbon transition that has rural Ireland at its core and is socially just. It requires an openness to change in society and a willingness to consider new approaches and new sources of income and wealth. There is a need to sell this narrative to citizens.