M J Nolan (Carlow-Kilkenny, Fianna Fail)

The Minister of State outlined where we are coming from and the challenges we face. I will talk in general terms about how it will affect us as a country and a people, and the wider context of how we address the challenges in Europe.

We cannot deal with this problem in isolation. As a relatively small country in Europe and an even smaller country in the global context, we must look for a global solution. I commend the efforts of the European Union in trying to bring some order to what is a serious international problem. However, the European Union cannot solve the problem on its own as it is not a European problem or an Irish problem, but a global one and it must be sorted out in the context of a global solution.

It is important to refer back to the Kyoto Protocol. The protocol was an admission and a bold effort to try to bring some order to what is a difficult problem. It is important to make some comparisons to show how the protocol has affected Ireland and Irish industry. When the agreement was negotiated in 1990, Ireland's gross national product was €58 billion, but today it is €145 billion, an increase of approximately 140%. Our gross domestic product then was €63 billion and in 2007 it was €157 billion. We had 83,000 cars in the country in 1990 and now we have over 170,000. These increases and the wealth that has been created have impacted on our carbon emissions. When we negotiated the Kyoto Protocol in 1990, we were producing 54 million tonnes of carbon emissions. Today, we produce in excess of 70 million tonnes. It is easy to look back in hindsight, but one could say we got a very poor deal at the negotiations.

We must be realistic and understand the current EU emissions trading scheme proposals will impact severely on the health of Irish industries if we do not take a firm hand in the negotiations. A timescale has been set down by the European Union and the European Parliament and decisions will be taken early next year on finalising those proposals. The Commission proposes a system of auctions as the basis of carbon allowances after 2012. This will have a serious impact on certain Irish industries. This proposal is not acceptable to energy intensive industries. There is not one town or county that would not be seriously affected if the energy intensive industries were to be pushed out of business, or where the produce of those companies would be imported as a result of these proposals, and we must examine this issue seriously.

Many companies are beginning to question whether they will invest here. Many of these intensive industries require an investment timescale of five or six years and must plan in advance. These companies need certainty and clarity now on the impact of EU plans on their investment proposals. The also need reassurance from the Government and from the European Union that, having invested, they will get a timeframe to claw back their investments and that they will not be faced with unfair competition from overseas.

Many of these companies have invested in best available technology, but are subject to competition from countries where there is no carbon constraints. We must be careful of this and if it is not changed, the inevitable consequence of the Commission's proposals will be to drive energy intensive industries out of the European Union, which is not acceptable to many Members. It makes no environmental or economic sense. We have already seen the leakage of jobs due to the high cost of doing business not only in Ireland, but in the European Union. Some 10 million tonnes of cement were imported into the European Union in 2007 from China alone. We will see more and more of this unless we get our act together and come up with sound economic proposals to address these problems.

Many Irish companies have invested in world class energy-efficient technologies. In recent years the reduction of between 10% and 20% has been achieved in carbon emissions per tonne of product, which is a good sign. I do not think the same efficiencies are being made in some of the countries we are competing with currently.

Fuel and power accounts for approximately 40% to 50% of production costs in some of these companies. In Deputy Hogan's constituency and my own we have a lime production plant and I spoke to the company management recently. I was told there was between 50% and 60% energy input in production there. The company is seriously concerned about its future if it must face competition from countries with no carbon restraints. These people have invested significantly in updating the plant in Carlow and are building a new plant in Clare. They would like to see a chance for fair competition.

It is important to remember that if we lose business to overseas companies, apart from the loss of jobs and the loss to the economy, carbon emissions will increase. The carbon emissions in making the product will remain but there will be additional emissions from the transport costs over the sea and sometimes halfway around the world. These issues must be addressed and I hope the Government will take action in that regard.

The deadline for the plenary amendments for the European Parliament is December and a vote is expected on 16 December. It then goes to the European Council for decision and this will probably happen during the course of the French Presidency, which finishes at the end of the year.

The question of climate change is topical and not only in Ireland. Of late I have noticed the business sector has become increasingly interested in the topic because of the impact it will have. It affects generation of electricity, cement and lime production, and these are industries which will be seriously affected unless we, as a Government, protect them.

It is timely that the partnership process is under way and we are getting a new social partnership agreement. The Minister and Taoiseach are very interested in securing agreement in that respect. We face challenges in the economy with a rise in the rate of redundancies, other challenges in the labour market and a much more difficult trading environment, which threatens export growth. How we deal with climate change must take this into account.

I ask the Minister and his Government to look sympathetically on the industries that will be most seriously affected by these proposals.

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