Eamon Gilmore (Dún Laoghaire, Labour)

This is the last Dáil debate of 2006. It is about an issue which coincides, almost to the day, with the life of the Fianna Fáil-Progressive Democrats Government but it is an issue which will affect our finances and our quality of life for decades to come.

The Kyoto Agreement was the most important international treaty of our times. It was made in 1997, just as Fianna Fáil and the PDs were settling in to what would become ten years of Government. The Kyoto Agreement told those who did not already know that greenhouse gases were damaging our planet, that they would cause significant and unpredictable changes in climate, and that the countries and peoples of the world would have to act collectively to reduce greenhouse gas emissions and to reconcile economic activity with the environmental imperative to protect this planet.

Some simply did not believe it. It was not until the levees of New Orleans were washed away that President Bush even acknowledged the possibility of climate change and global warming. It was, as Al Gore put it, "an inconvenient truth", especially for those so closely tied to the oil industry.

The freak storms, flash floods and other climatic events of the past decade have acted as trailers for what global warming may eventually do to our cities, coasts and neighbourhoods. The recent Stern report in the United Kingdom documents the reality of global warming and climate change, and the necessity for urgent and effective action.

Almost ten years ago, at the beginning of this Fianna Fáil-PD Government, the Kyoto Agreement set down for Ireland what needed to be done. The European Union, to its great credit, took Kyoto seriously and agreed a basket of measures which were required by European Union member states. Most countries were required to cut their emissions of greenhouse gases. Ireland, however, was allowed an increase of 13% above the 1990 levels, given our need for economic growth and the need to catch up with the rest of the European Union. We were given until 2012 to be 13% above our 1990 greenhouse case emissions.

However, Fianna Fáil and the Progressive Democrats Party never took Kyoto seriously. It took them three years to produce a national climate change strategy, which they then ignored. In 2002, they handed out 95% of the carbon allowances for the emissions trading scheme for free, even though they were being urged by the European Commission to auction more of these allowances. With just over five years to go until the 2012 deadline, Ireland is now 23%-26% above the 1990 level, depending on whose figures one takes. According to the Minister himself, Ireland must reduce carbon emissions by 8 million tonnes by 2012, obtain a further reduction of 3 million tonnes under the ETS scheme and then buy 3.6 million tonnes of carbon credits on the carbon market. For a country that has actually increased its carbon emissions in the ten years since Kyoto, that is a tall order.

The greatest failure of public policy in Ireland for the past half century has been that of this Government on climate change. The Government has let the party continue for the past ten years and has failed to act effectively on Kyoto. As our country's economy and finances improved, this Government concluded that we could carry on polluting and pay the carbon bill at a later stage, from our increased wealth. This reckless, irresponsible policy — pollute now, pay later — will cost the Irish taxpayer very dearly. It may damage both our economy and our environment. It is the Government's failure to deal effectively with the Kyoto Protocol that is exposing to greatest risk the very businesses and industries that the Minister purports to protect.

The Carbon Fund Bill 2006 before the House today will set up a means by which taxpayers' money will be used to buy our way out of reducing carbon emissions. The Government states that Ireland will have to buy 3.6 million tonnes of carbon per annum for each of the five years up to 2012, at a cost of €15 per tonne and at a total cost to the taxpayer €270 million. This is a gross under-estimate of the total potential cost. The figure of 3.6 million tonnes does not take any account of the additional 1.5 million tonnes which may now have to be bought following the European Commission's decision to reduce the emission trading scheme allowances by that amount. I hope that the Minister will be successful in mitigating that cut in his talks with the Commission, but it is likely that when the new national allocations plan is finally approved, it will result in some additional requirement for the purchase of carbon.

The Minister's figures also assume that the country will achieve a reduction of at least 8 million tonnes of carbon over the next five years, despite the fact that over the past 15 years we have increased our carbon output by about a quarter. It is not unreasonable to suggest that the amount of carbon which we will be required to buy in each of the next five years will be at least 5 million tonnes, not the 3.6 million tonnes estimated by the Government. It is also reasonable to assume that the price of carbon will increase. The Minister is assuming a price of €15 per tonne. The European Commission believes that the price of carbon is too low and is making the ETS less than effective. It wants the price of carbon to increase to about €30 per tonne, and there is now a considerable body of informed international opinion which indicates that the price of carbon will increase to that level. In that scenario, the short-term cost to the Irish taxpayer will not be the €270 million predicted by the Government but €750 million, which is 5 million tonnes per annum for five years at €30 per tonne. That will pay the bill only to 2012, after which the cost could increase by several multiples, as the second round of Kyoto will require major reductions in carbon emissions.

In effect, the Government is now asking the taxpayer for €750 million to buy hot air. This is five times the amount of money the Government wasted on PPARS, 15 times the amount wasted on electronic voting machines and 50 times the amount spent on the equestrian centre in Punchestown. This money is being spent to pay for the Government's failure on Kyoto. When people wonder why, despite all the country's wealth and the Government's tax revenues, we cannot get a bus on time, cannot get a bed in hospital for a sick relative, or cannot get enough guards to protect the innocent from crime, we should remember that this Government is wasting the taxpayers' money on failed pet projects, as well as on the purchase of hot air.

This could have been avoided if the Government had acted on time and had given responsible leadership since the Kyoto Protocol was agreed almost ten years ago. The carbon fund should have been established at least when the ETS began. Instead of gifting carbon allowances to polluting industries, the Government could have sold or auctioned more of those allowances and put the proceeds into the fund. That would at least have reduced the financial burden on the taxpayer. More importantly, there are many steps which could and should have been taken and can still be taken to reduce carbon emissions in the first place, which would be better for the environment and easier on our collective pockets.

See this speech in context