Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I thank Deputy Fitzmaurice and the other Deputies who spoke. I am heartened by the fact that, in general, nearly every Deputy here accepts that climate change is happening and something has to be done. We can work together on the challenges of how we help people to change their behaviour, how we give them a way out and something different to do rather than telling them what they cannot do. We must also examine how we fund them and give them what they need. What about the different roles of the Government and the public sector? What is their responsibility versus the role and responsibility of corporate interests, companies and private interests? Are they doing their share versus what communities and individuals have to do?

In terms of walking the walk and talking the talk, during the debate on the Climate Action and Low Carbon Development (Amendment) Bill, many Deputies put forward great ideas. In terms of ambition, they questioned why we could not cut emissions by 60%, 70% or 80% rather than by 50%. There were great abstract ideas about what needs to be done, but when some of those same Deputies found there was a wind farm or cycle lane in their area, they were not able to bring themselves to support these developments in their own communities. We must walk the walk and do the stuff ourselves. We must lead by example. To help with that, the Government has an enormous expenditure programme which is being reviewed and is about to be announced shortly. It will be worth in excess of €100 billion, and much of it will be targeted towards helping the transition to take place.

Tools are used within the Department of Public Expenditure and Reform to decide how good projects are and whether they qualify for support. The public spending code is one of those tools. It is used to evaluate the consequences of the capital investment decisions it faces. Every public investment project with a value above €20 million must conduct a full analysis on the potential costs and benefits associated with it. We must look at the rules in light of the changes in the environment. Given the challenging and legally binding greenhouse gas emissions reduction targets Ireland faces, it is critical to ensure the code takes account of the environmental consequences of any investment decisions. Already, the code requires that every project must estimate the impact it is likely to have on greenhouse gas emissions and other environmental factors such as air quality. Any greenhouse gas emissions are then valued at the price it will likely cost society to reach our climate targets by adopting an offsetting measure that will reduce greenhouse gas emissions.

In 2019, the price of carbon that is applied in the code was tripled. This was based on estimated marginal abatement costs of achieving a 30% reduction in greenhouse gases by 2030. The Government is now moving to the target of a 51% reduction by 2030. That means it becomes more expensive as we go along to achieve the carbon reductions. Accordingly, the shadow price of carbon will change, which means that for every project that emits more carbon, there are more negatives and it is harder to justify a project. In addition to the Government's target of reaching a 51% reduction in greenhouse gas emissions by 2030, it wants to reach climate neutrality by 2050. It is clear the public spending code must adapt to reflect this new ambition.

A full reform programme on the climate and environmental aspects of the public spending code will be contained in the new national development plan, which is about to be published. In the first instance, the priority will be on increasing the cost of carbon that is applied in the code to reflect the Government's enhanced climate ambition. This work will be informed by the research that is underpinning the development of the Government's forthcoming climate action plan.

The Department is also working with the OECD and the European Commission on further reforms to the code. Work will be progressed on a new model for assessing the emissions impact of infrastructure investment. This is to ensure the full range of potential consequences for this type of investment are captured and valued correctly. For example, the greenhouse gas emissions associated with a new road investment are not just the emissions attributable to the construction work and the materials used in that road, but rather they should also incorporate some assessment of the emissions consequences of the future usage of the road, including the induced traffic. This work will entail considering how such assessments are performed at the moment and what reforms might be implemented to improve these assessments.

Work will be progressed on understanding the role of an instrument like the code in a scenario where net-zero greenhouse emissions must be achieved by 2050. The marginal value for 1 tonne of greenhouse gas emissions in 2050 should be based on the estimated cost of eliminating the last tonne of carbon or, more likely, the estimated cost of a measure that will sequester or capture this carbon. This cost is subject to considerable uncertainty but is likely to be considerably higher than the figure in use today. Ultimately, the objective of this programme of work is to allow the Government to take decisions that are fully informed by the best possible evidence on the consequences of these decisions.

I know that was quite technical, but the solution to this problem is going to involve respectful listening and talking to everybody, going out to communities, and working together. We have a common purpose and we can achieve this just as we did in the past year or two in the pandemic.

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