Mr. Sebastian Barnes:

Climate change is a very important issue for the public finances. If climate change is not addressed, there is a potential cost in terms of mitigation, particularly in terms of flooding but also a number of costs that would be related to it. In addition, if nothing is done, there is the cost that a more violent and costly adjustment will be needed down the way. Just from a public finance perspective, leaving aside all the benefits in terms of making life on this planet more sustainable, taking policy measures in this area is a very important thing to do.

In terms of the impact on public finances, there are some positive impacts. For example, some of this could be achieved by higher environmental taxes such as the carbon tax or through charges and things like that. In addition, adapting and doing the transition to a low-carbon economy could create activity in the economy which would create employment and tax revenues in that way. It is not a wholly negative story for the public finances. However, there are some areas where investment, especially public investment, will be needed to achieve those objectives and where incentives will potentially need to be provided. There will be a cost to the State in that case and it needs to be factored into the State's plans. It is very helpful that there is now a clearer target in this area, and it is to be hoped the economic plans can be aligned to make sure this can be achieved in a way that is effective but is also consistent with the sustainability of the public finances.