John Gormley (Dublin South East, Green Party)

Since the publication of the national climate change strategy in 2007, the relevant Departments have been working on the development of further measures to reduce Ireland's greenhouse gas emissions. This work is overseen by the Cabinet committee on climate change and energy security, which is chaired by the Taoiseach. I have been reporting progress to the Oireachtas on an annual basis whenever I present the carbon budget to the House.

The focus of the 2007 document was very much on Kyoto compliance over the 2008-12 period. While the measures now being developed will support this, their longer-term impact is of even more importance. Significant structural change is required across all sectors of our economy if we are to meet the much more demanding targets to which we are now committing ourselves. Under the recent EU climate and energy package, Ireland has taken on a target of a 20% reduction in emissions between 2005 and 2020, and this target will increase further when a new global agreement on climate change is reached, hopefully in Copenhagen next December.

The last carbon budget showed a requirement for Government purchases of up to 4.6 million allowances per year over the 2008-12 period. I noted at the time that this was based on EPA emission projections which assumed economic growth rates similar to those published in the ESRI's medium-term review in May 2008, and that it was already apparent that these forecasts were now over-optimistic. Since then, in light of the changed economic outlook, the EPA, with the assistance of the ESRI and other relevant agencies, is revising its emission projections. While this work is not yet complete, I understand that the new projection will be significantly reduced.

The global economic downturn is already leading to a fall in the market price of carbon credits. While the Government's projections of the cost of the purchasing requirement had assumed an average unit price of €15, markets are currently operating at closer to €11. Overall, the cost to the Government will be much less than previously forecast, due to the fall in both the volume and unit price of carbon credits.

I must emphasise that the use of carbon credits must be supplementary to emission reductions and that we must not, under any circumstances, allow the option to purchase credits to deflect from the fundamental objective of taking the necessary actions towards a low-carbon trajectory in the longer term.

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