Dr. Paul Deane:

I thank the joint committee for extending the invitation to speak at this session. I wish to acknowledge the many fine investments currently held by the Irish Strategic Investment Fund, ISIF, in its current portfolio in wind, solar and renewable energy companies across the globe and the €44 million capital committed to energy investment in Ireland at the end of 2015.

Ireland must take its climate change commitments seriously. The warming of Earth’s climate system is unequivocal and human influence on the climate is clear. Limiting climate change requires substantial and sustained reduction in greenhouse gas emissions through investment in renewable energy, energy efficiency and low-carbon technologies. The challenge to reduce greenhouse gas emissions is well understood by the Government and is reflected in the national policy on climate action and low-carbon development of 2014 and in the Climate Action and Low Carbon Development Act 2015. The national policy position establishes the fundamental national objective of achieving a transition to a competitive, low-carbon, climate-resilient and environmentally sustainable economy by 2050. Current investments held by the Irish Strategic Investment Fund in global fossil fuel companies such as China Coal Energy, Canadian Oil Sands, Yanzhou Coal Mining and many others are at odds with this vision and cannot be reconciled with current Government climate policy. These investments do not help to advance the Government's stated vision and do not contribute to an overall global reduction in greenhouse gas emissions as required by the Paris Agreement on climate change and therefore these global investments should correctly be phased out.

The global fossil fuel sector received $493 billion in subsidies last year and therefore should not require any assistance from Irish citizens or the ISIF. Ireland faces serious challenges in meeting energy and climate policy objectives and our current level of activity needs to be significantly ramped up to realise our stated national policy position. Ireland is likely to face financial costs in 2020 to purchase compliance to meet greenhouse gas emissions reduction targets and we will also have to pay for separate compliance to meet our renewable energy targets. From a climate and policy perspective, this makes Ireland one of the poorest performers in Europe.

Further investments from the Irish Strategic Investment Fund in renewable energy and low-carbon technologies in Ireland therefore should be encouraged in place of investments in global fossil fuels companies, thus sending a signal that Ireland is serious about its stated commitments on climate change. In keeping with the wider goal of the National Treasury Management Agency, NTMA, these investments should look to support economic activity and employment in Ireland and provide long-term value for the State and citizens.

In reading the Bill, I make the following two observations. Given the scale of the challenge in decarbonising our economy, the small number of energy companies in Ireland and size of the market here, I believe that all possible options should be made available to enable a transition to a low-carbon economy including the option of the Irish Strategic Investment Fund to provide investment to Irish companies that use fossil fuels to produce energy under strict conditions.

Specifically, I believe the Bill should distinguish or allow some mechanism to differentiate for investments in Irish projects that involve the use of abatement technologies with fossil fuels such as carbon capture and storage. Carbon capture and storage is an existing technology that allows the majority of emissions from conventional power plants, fuelled with fossil fuels, to be captured and stored in long-term geological storage. It can also be applied to the cement sector and other industrial processes. Carbon capture and storage means that the harmful emissions coming from fossil fuels do not reach the atmosphere and do not contribute to climate change, thus achieving the same climate objective as renewable energy.

When carbon capture and storage is used with biomass or woody crops, it allows for the possibility of a net removal of emissions from the atmosphere. These technologies are identified by our research in University College Cork, UCC, and other international research as critical components to achieving our obligations under the global Paris Agreement on climate change. In the absence of private capital for the potential development of carbon capture and storage projects in Ireland, the option of investment from the Irish Strategic Investment Fund should be available as it advances the Government’s vision of a low-carbon Ireland and enables our commitments under the Paris Agreement.

Second, I believe that the Bill, when applied to Ireland, should not preclude investments in Irish companies where that investment is dedicated to transitioning that company away from fossil fuel and significantly lowering its carbon footprint. Investments like these would advance the Government’s vision of a low-carbon Ireland and enables our commitments under the Paris Agreement. Equally, these investments, if properly structured, will provide long-term value to the State. These additions would be a constructive addition to the Bill, making it a truly transition-focused Act.

The decision for Ireland to divest from global fossil fuel companies is a very small step on the long road to a low carbon economy. Fossil fuels will remain in the global energy mix for a long time to come and the Fossil Fuel Divestment Bill’s impact on the global industry will be minimal. Its significance, however, is in the choice that we are making as a country to fully back a vision of a low-carbon, climate-resilient and environmentally sustainable economy.

In Ireland, we talk the green talk about climate action but are failing to the walk the walk and on its delivery. We have a chance with the Fossil Fuel Divestment Bill to show the world that we are finally serious about our climate change commitments.