Dr. Niall Farrell:

As Dr. McQuinn said, the literature suggests that carbon taxes are the most efficient way to reduce carbon emissions with the lowest cost to society's welfare. An interesting international analysis was to look at the effect of a subsidy on its own compared with a carbon tax. When there is a subsidy to make renewable energy cheaper, that is fine, but then everybody switches to renewable energy and the price of the unused carbon-emitting technology goes down again and people switch back. In order to make the change stick, carbon emitting things have to be made more expensive. One thing arising from the previous comment is that the middle-income cohort can be constrained or negatively affected. There are available redistribution options to target whoever is expected.

The Deputy mentioned supply constraints with regard to retrofitting. We need to have a lot of retrofitting and housing. Asking whether we will have the necessary capacity in the construction sector is a valid comment.

Regarding EirGrid and supply constraints in the electricity market, one thing to take into account is that tighter constraints are projected in the future. There is perhaps an increased risk of something happening but it does not necessarily mean that something will happen.