Enda Kenny (Mayo, Fine Gael)

Before proceeding to answer the question, I wish to make a point of clarification for Deputy Martin and the House. Primary responsibility for questions relating to carbon at a sectoral level are matters for the Ministers concerned. My Department's sole area of responsibility relates specifically to an initiative in the green finance area tasked by the IFSC clearing house group, which is chaired by my Department.

In that regard the position is as follows: the programme for Government states that "Ireland will be developed as a centre of excellence in green finance and carbon management, through the creation of an enabling, co-ordinated and supportive environment".

The green IFSC initiative emerged from a workshop on the future of the IFSC, chaired by the Department of the Taoiseach in February 2009. In November 2009, the Government's high level action group on green enterprise welcomed the establishment of a sub-group - the Green IFSC Steering Group - and the work being carried out in examining green finance opportunities.

Earlier this year, members of the Green IFSC Steering Group were tasked with developing a detailed business plan for the delivery of an initiative to secure a leading position for Ireland as the world moves towards a low carbon global economy. This initiative seeks to build upon the reputation of the IFSC as a leading global financial centre and to develop Dublin as a global hub for green finance.

In July this year, I launched a new strategy for the international financial services industry in Ireland 2011-2016. In the opportunities for growth section of the strategy the potential of green financial services is clearly outlined.

A feasibility study was carried out under the auspices of the IFSC clearing house group in 2010. The goal of the feasibility study was to determine the scale and shape of the green finance opportunity and to determine whether the concept has sufficient potential and substance to be launched as an initiative within the overall framework of the smart-green economy.

The study found that an opportunity does exist for Ireland and its financial services industry to play a role in the further development of a vibrant domestic and international green economy sector. The most promising opportunities involve the development of Ireland as a centre of excellence in green finance, a centre of excellence in the management of carbon and, finally, the creation of an enabling, co-ordinated and supportive eco-system to facilitate this development.

Activity elements therefore include banking, project finance, treasury, asset management, fund services, insurance-reinsurance, carbon markets management, venture capital, private equity, regional HQ activities - including financing and holding company activities - intellectual property, third level education and R&D activities.

There are significant factors beyond Ireland's control that will impact upon the development of international carbon markets in the future. In particular, there is uncertainty around a successor to the international treaty on climate change, the Kyoto protocol. A new treaty which binds developed countries to ambitious climate change mitigation targets, would be a key driver of carbon markets.

Notwithstanding this uncertainty, considerable opportunities do exist in the wider area of green financial services and will continue to grow as the interest in and take-up of green financial products expand more generally, and as new green financial products are developed.

A marketing and business plan, including the proposed establishment of a Government-supported carbon markets initiative, is currently being reviewed by an independent cross-departmental evaluation group which has been established to review the proposals contained in the report entitled Global Green Interchange - Carbon Markets and Green Finance (Securing Ireland's Competitive Advantage in the Transition to a Global Low-Carbon Economy). I expect the evaluation group to report back to the clearing house group in the near future.

See this speech in context