Dick Roche (Wicklow, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

The Government is committed to meeting Ireland's greenhouse gas emissions reduction target for the purpose of the Kyoto Protocol and we will do so in a manner which is logical and structured but without interfering in the growth and development of the nation. The fundamental elements of our strategy for meeting our target involve domestic emission reductions across the economy, participation by 109 Irish installations in the EU emissions trading scheme and the purchase of a limited number of carbon credits through the flexible mechanisms provided in the Kyoto Protocol.

The purchase of carbon credits is a legitimate, practical and logical option under the Kyoto Protocol. As well as being a key part of the Kyoto arrangements, carbon trading is endorsed in the Stern report and by the EU Commission and is central to virtually every member state's Kyoto programme, as well as being supported by the UN Secretary General, Kofi Annan, and Al Gore. However, the Irish debate on carbon credits regrettably has been polarised.

The participating states in Kyoto could have adopted a variety of approaches, such as the system suggested by Deputy Eamon Ryan for allocating every person on the planet a carbon ration, but did not do so on the grounds that they would create a massive global bureaucratic burden. Another such option was to place an absolute cap on carbon emissions, which would require every industry to cut emissions to a pre-determined figure. While this idea has clear merit, it also has cost implications which, in the Irish case, would be ruinous for many businesses.

The Kyoto parties could also have gone down the road of mandatory carbon taxes, as was proposed by the Green Party and more recently by Sinn Fein, but the economic and social disadvantages were seen as outweighing the practical benefits. Furthermore, the effect of carbon taxes is regarded as questionable. The increases in global oil prices over the past two years has not resulted in a significant decrease in transport emissions, while the increased fuel costs associated with a carbon tax would primarily affect vulnerable sections of the community. Over the past few weeks, various other solutions have been put forward, no doubt sincerely, in the House and in the Joint Committee on Environment and Local Government. There is merit to many of these but a judgment must be made on whether their costs outweigh their virtues.

In the debate at the joint committee on the emissions trading scheme, it was argued that the State should not buy credits because doing so would take the burden off polluting companies. This line of debate misses the point that the emissions trading system applies to 109 companies and places the specific burden on their shoulders of cutting annual emissions by 3 million tonnes.

What would be the consequence to Irish industry or foreign direct investment if this burden was to be significantly increased in the manner suggested by the Labour Party and the Green Party? What would be the effect on the cement industry, even if it is not our favourite industry? The damage, for example, to the cement plant in Deputy O'Dowd's constituency would be ruinous. As that Deputy has argued, a balance must be found.

Yesterday, I met representatives from the Irish pharmaceutical sector which, they said, directly employs 24,000 people and exports goods to the value of €40 billion, with a further 20,000 to 30,000 people employed related areas. The sector incurs significant energy costs and is part of the trading system, but it would face a perilous future if we were to introduce more restrictive measures. Who would explain to workers in Aughinish Alumina or small businesses that they are losing their jobs because our unnecessarily fundamentalist approach is driving up energy costs?

A report issued this week by Sustainable Energy Ireland suggested that emissions from the energy sector grew by 3.2%, while output grew by 3%, due to an increase in electricity generated by turf. In response, Deputy Gilmore has suggested that we should curtail peat extraction, stop using it as an energy source and conserve bogs.

Eamon Gilmore (Dún Laoghaire, Labour)
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That is not quite what I said.

Dick Roche (Wicklow, Fianna Fail)
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A good case could be made for conserving bogs because they are important to biodiversity and act as carbon sinks. This Government has done more than any previous one to designate bogs for protection. However, Deputy Gilmore's proposal could be very expensive. Who would explain to the workers in the two newly constructed peat power stations in the midlands why they are losing their jobs? What would be the implications for our security of energy supply of putting all our eggs in one basket? These power stations have been included in Ireland's emissions projections and they have the potential for being used for the co-generation of energy using bio-crops. I acknowledge that peat bogs are important for biodiversity and as carbon sinks, but I am also conscious of their economic importance. What about domestic turf burning? Would anybody in this House really be happy to ban turf cutting, which is part of the way of life in many midland and western counties?

Eamon Gilmore (Dún Laoghaire, Labour)
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Who suggested that?

Dick Roche (Wicklow, Fianna Fail)
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Any balanced judgment would suggest that such a ban is not a good idea.

Eamon Gilmore (Dún Laoghaire, Labour)
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The Minister is departing from his script.

Dick Roche (Wicklow, Fianna Fail)
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Deputy Cuffe suggested at a meeting of the Joint Committee on Environment and Local Government that we should reduce the significant level of investment we are making in motorways and invest those moneys in public transport. He made the valid point that public transport is important if we are to cut our emissions. I remind him that the Government is investing a great deal of money in Transport 21 for that reason. I disagree with his suggestion that the proposed motorway between Dublin and Galway should be put on hold until a Luas system has been developed in Galway. Would the people of Galway, including the members of that city's council and its mayor, agree with that suggestion? I do not think the people who live in the villages on the existing road between Dublin and Galway, which are currently choked with traffic, would agree.

Trevor Sargent (Dublin North, Green Party)
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Many of those places are by-passed.

Dick Roche (Wicklow, Fianna Fail)
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A great deal has been said about the transport sector, which is a very heavy producer of emissions. A key point that is often overlooked in debates of this nature is that the UN's greenhouse gas accounting rules mean that fuel — petrol and diesel — that is purchased by motorists and hauliers in this State, but consumed elsewhere, must be recorded in Ireland's greenhouse gas inventory. I do not know why that point has not come to the fore. Such fuel purchases — this phenomenon is sometimes referred to as "fuel tourism" — were estimated to have accounted for 2.4 million tonnes of Ireland's greenhouse gas emissions in 2005. That is the equivalent of two thirds of the Government's annual purchasing requirement of 3.6 million tonnes.

The revenue that is raised from excise and VAT on the sale of such fuel amounts to approximately €370 million per year. Members will be aware that the total amount allocated in the recent budget to meet the Government's allowance-purchasing costs was €270 million. That cost is more than offset by the receipts from fuel tourism. I make that point in response to those who have argued that the Government's actions in this regard are equivalent to picking up a tax cost. We have to take a more balanced view. I do not deny that arguments can be made on all sides of this debate. I am simply saying that we need to strike the kind of balance that has been suggested by a number of Members.

The European Commission supports the expansion of emissions trading to a global level, which was recommended in the Stern report. This effective instrument is consistent with the principles which underpin the Kyoto Protocol. I do not doubt that emissions trading will continue be a key feature of the international climate change regime. Deputy Cuffe has acknowledged on a number of occasions that the flexible mechanisms which are provided for in the Kyoto Protocol, particularly the clean development mechanism, are important not only to developed nations but also to developing countries because they attract significant investment in modern clean technology. This aspect of the debate was evident at the recent meeting in Nairobi of the parties to the Kyoto Protocol. The flexible mechanisms are important for investing countries as well as the countries where the investment is made.

Ireland's greenhouse gas emissions, as a proportion of all global emissions, account for less than the equivalent of 30 seconds. If we closed down the entire Irish economy, we would cause a great deal of hardship on this island but the global impact would be negligible. We must accept that economic and social problems would arise if we decided not to buy credits to supplement our domestic action aimed at meeting our Kyoto Protocol commitments. Other countries with strong environmental commitments, such as Denmark and the Netherlands, have had well-developed purchasing programmes in place for a number of years. The alternative for Ireland, which is to force industry or the domestic sector to carry the full burden, would have severe consequences. It would become even more costly to locate business and jobs in Ireland, the cost base of all industries would rise, electricity prices would be inflated and domestic producers would face undercutting from imports. Who would benefit from undermining companies and jobs in Ireland, which would be the precise consequence of the excessively rigid ideological approach that is being advocated by some people?

We do not have to choose between meeting our Kyoto Protocol targets and maintaining economic competitiveness and growth — we can and should do both. We have a moral responsibility to meet our Kyoto Protocol targets and we have a national responsibility to maintain economic competitiveness and growth. That point was made by Sir Nicholas Stern in his often quoted, but, I suspect, seldom read, report. The obvious benefits of a shift to a low-carbon economy would include significantly lower energy costs and major gains in efficiency. We all agree with the suggestion in the report that substantial opportunities would accrue from a shift to a low-carbon economy. That argument is based on a great deal of logic. The report states that "markets for low-carbon technologies will be worth at least $500 billion, and perhaps much more, by 2050".

Ireland has a proven track record of decoupling greenhouse gas emissions from economic growth. In 2004, the last year for which figures are available, national emissions were 23% above their 1990 levels. Our economy grew by 150% in the same time. There are many more cars, houses and jobs in the country than there were in 1990. There has been significant growth in industries which are emitters. I will spell out clearly the Government's position in case it is not understood. Ireland will comply with its Kyoto Protocol targets sensibly and honestly, without compromising economic growth or jobs. It will adopt a sensible approach that is fully consistent with the Kyoto Protocol.

The Government has capped the State's purchasing requirement at 3.6 million allowances per annum, or 18 million allowances in total over the five years between 2008 and 2012. Incidentally, if one does some calculations, one will probably find that the allowances to be purchased by Ireland over that period, as a proportion of all global greenhouse gas emissions, account for less than the equivalent of one second. The announcement in the budget that €270 million will be provided between now and 2013 sets out a definite financial basis for purchasing. It will build on the money that was provided by the Minister for Finance in 2006. In addition to providing financial resources, it is essential to put in place appropriate institutional arrangements for the purchase of carbon credits by the State. The Bill before the House designates the National Treasury Management Agency as the purchasing agent for the State.

I will outline briefly some of the main provisions of the Bill. Section 1 provides for the definitions in the Bill, which are quite straightforward. Section 2 addresses the main functions of the Bill. It establishes the carbon fund, gives control and management of the fund to the Minister for the Environment, Heritage and Local Government and delegates the management of the fund to the National Treasury Management Agency. The purchase of Kyoto units by the agency will be guided by certain principles. The units will have to contribute to the ultimate objective of the UN Framework Convention on Climate Change. There will be no investment in projects related to nuclear power. The investment risk will be minimised, particularly in respect of the timely delivery of credits. Good value for money will be obtained. Section 2 also provides that the Minister for the Environment, Heritage and Local Government may, following consultation with the Minister for Finance, direct the agency to purchase Kyoto units on foot of an agreement between the Government and other sovereign parties, or to dispose of Kyoto units if the amount held is surplus to requirements. The reference to the Government and other sovereign parties is important because government-to-government trading is the most ethical and economical way of proceeding in this respect.

Section 3 provides for the funding that will be required for the acquisition of Kyoto units. This provision enables the National Treasury Management Agency to draw funds directly from the Central Fund on an ongoing basis as needs arise. Sections 5, 6 and 7 provide for the provision of proper accounts by the agency in managing the carbon fund, the audit of the accounts by the Comptroller and Auditor General and the accountability of the agency to the Committee of Public Accounts. The agency will also be required to provide the Minister of the day with an annual report of its activities in managing the carbon fund. The Minister will lay such a report before the Houses of the Oireachtas. There will be full democratic accountability in the process. Section 8 provides that the Minister may revoke some or all of the functions assigned under the Bill to the National Treasury Management Agency, following consultation with the Minister for Finance.

The House will be aware that the European Commission recently made a decision on Ireland's national allocation plan for emissions trading between 2008 and 2012. I realise that this has been a busy period for Members and, therefore, they might not have had an opportunity to consider fully the contents of the Commission's report. There were some interesting points in the Commission's adjudication. It took the view that Ireland has not shown sufficient progress on the purchase of Kyoto units to supplement domestic emission reductions. That observation belies the suggestion that a negative view of carbon credits is taken in Europe or elsewhere — that is simply not the case.

Arthur Morgan (Louth, Sinn Fein)
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It had no option but to say that.

Dick Roche (Wicklow, Fianna Fail)
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Nobody is taking a negative view of it.

Arthur Morgan (Louth, Sinn Fein)
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No other provision has been made.

Dick Roche (Wicklow, Fianna Fail)
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The notion that purchasing carbon credits is somehow dubious was further contradicted in a joint press release that was issued yesterday by the European Bank for Reconstruction and Development and the European Investment Bank. Announcing the fund in which Ireland has invested, the president of the European Bank for Reconstruction and Development stated:

The region [in which the fund is to be invested] has huge potential to address the issues of climate change and energy security, which are two themes that dominate the global agenda. The European Bank for Reconstruction and Development is helping the region to realise this potential by financing the efficient use of energy that will cut demand and imports, and also reduce pollution and adverse climate change.

Management of this investment will be taken over by the National Treasury Management Agency on enactment of the Bill. This is endorsement internationally of the ethical nature of the very investment we have been discussing somewhat heatedly.

Early enactment of the Carbon Fund Bill is a further important step in demonstrating progress towards meeting our Kyoto target. It is a sensible and perfectly valid option which will ensure that the Irish companies participating in the European emissions trading scheme do not bear an unfair share of the national or international burden in the period 2008-12.

Ireland will play its part in terms of the Kyoto commitments but we must bear one fact in mind. Our emissions are minuscule in terms of the global problem. That does not take away from our moral responsibility to meet our targets but if we were to close down all of Irish business, we would save less than the equivalent of 20 seconds of the globe's emissions. The impact globally would be negligible. The impact nationally would be catastrophic. A sense of balance is needed in the debate.

The importance of this Bill for the viability and competitiveness of Irish industry cannot be overstated. I thank the Whips for making time for today's debate. I commend the Bill to the House and urge all sides to support it.

Fergus O'Dowd (Louth, Fine Gael)
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This is an important debate but there is not sufficient time to fully tease out the arguments. What this country needs is leadership in terms of climate change but we are not getting that from the Government. We need leadership, a clear vision, a plan of action and, most importantly, a change in our own behaviour. The reality is that unless all of us make fundamental changes in our homes, our lifestyle, where we work, how we go to work and where we live, we will not deal successfully with the issue of climate change.

It is disingenuous of the Minister to suggest that regardless of how bad our emissions are in Ireland, they are only minuscule in terms of the world's emissions. The reality is that all of us, no matter where we live, must make those changes. This Bill is about Ireland not having made the changes. It is about industry not being able to cut back on its fossil fuel use and its production of carbon dioxide emissions and not using other initiatives, which I will deal with later. The option to buy carbon credits elsewhere is an indication of the distance to target on which we are missing out.

As I understand it, our distance to target is approximately 7.14 million tonnes of CO2 which we must reduce to stay within the Kyoto limits. Any money we spend abroad in buying carbon credits, regardless of how attractive that might appear, is an acknowledgement of a failure of the system to deal effectively with the issues at home.

The Minister made reference to industries in my constituency. He referred to the cement industry and to Premier Periclase, which is an important factory in my town. I am very much aware of the effect of a carbon tax on those industries. I am equally aware of the effect on the other 109 facilities throughout the country. I acknowledge and support the principle that our industry must be competitive and that anything we do in terms of climate change must have at its core the maintenance of our economic development while cutting back on our emissions, using new technology and changing our ways to make that happen.

Most of our problems in Ireland arise from energy production and transport. While the Minister is not responsible for the transport portfolio, in terms of the national spatial strategy it has failed. All the infrastructure we are building is on the east coast. Everybody is trying to live on the east coast but we should make it attractive for people to move out of the city and live in Cork, Galway, Donegal or wherever. That would reduce our transport emissions and deal effectively with the problems of modern Ireland, where we are all crowded into the Dublin region.

It is disgraceful that for many of us who travel by train or car, the infrastructure does not exist to encourage people to get out of their cars. There are no park and ride facilities, a point I raise constantly, on the north of the country for those travelling into the city. That is not acceptable. There is no joined up thinking in the Government to deal effectively with the policy on energy, transport and agriculture and ensure all of us make every effort to change our lifestyles. We must make it easier for people to travel by public transport and encourage them not to pollute with carbon dioxide emissions.

The Government must encourage investment in new technology. We should encourage people to change the type of fuel they use. We should examine the possibility of increasing forestry, improving efficiency and effectiveness in business and improving efficiency in our technology. More money ought to be invested in research and development and we should incentivise that area as much as possible in terms of tax relief and new technology to allow people to change. At the core of all of that is the need to reduce our CO2 emissions. Notwithstanding the fact that I support in principle the need to buy carbon credits abroad, we are not doing enough at home.

One of the key actions the Government has failed to take was to set a sufficiently high target for renewable energies in terms of our total supply of energy from all sectors. Much of the money that is going abroad should be used to incentivise people to set up wind farms and examine research and development projects in renewable energy. That is an opportunity the Government has missed.

We must change the way we live. We must look at countries like Sweden which decoupled from thermal power production to biomass. We must encourage moves to all those areas.

Fine Gael's policy on those issues is clear. We will legislate to compel all fuel retailers to blend biofuel into fuel such as petrol, diesel and home heating oil. We would remove all excise duty on biofuels produced from renewable energy crops. In practice, that would mean that producers would not have to pay excise duty on the biofuels they produce, the knock-on effect being that consumers would enjoy cheaper fuel at the pumps.

We believe in an open public competition for start-up grants for the establishment and operation of biofuel processing plants. We would require all public transport vehicles and public service vehicles to convert, where practical and feasible, to forms of biofuel whether in a pure or blended form. The Minister's refusal to take our proposals on board means that our environment and our economy will suffer for another year.

Notwithstanding the green sell on the budget, there is no bite in what the Minister is doing because it will not happen. He is consulting but he is not acting. There are no substantial changes in VRT. He talked about redressing the issues in terms of car tax and pollutants but there is no real change in that respect because the Government has failed and continues to fail in that regard. It is all words and no action. That is not acceptable to us and it is not acceptable to the country.

The other issue I want to address is the way Fine Gael will address the issue of climate change. What will we do that is different? How will we ensure that there will be real change throughout our country? The core of our policy will be that the energy committees that have been set up — I understand 16 committees were set up initially throughout the country — to advise and deal with issues surrounding energy conservation and climate change will be put on a proper footing. They will be part of a local government effort, led by local government, to examine every aspect of life in our communities; it will be driven locally. From talking to people about this issue, the main questions they raise is who is introducing change, what is different and what is happening. The Government has policies on this area and the SEI is established, which does fantastic work, but nobody is driving the agenda for change locally. That is what my party will change. That is where the effort must be made and we will do that.

It is a shame that some of the energy committees established throughout the country do not have the necessary funding to continue operating. Some people working on them are employed part-time and there is no future for them in these jobs. Local government should be at the core of change with a real and aggressive policy that focuses on reaching local targets to reduce our overall emissions. There are leaders in the field. The local authorities in Limerick and Clare worked together and produced a strategy for climate change and emissions reduction for those counties. We hold up that strategy as the bible to be followed by every other local authority. That is the direction in which we need to move. We need to examine this issue at a micro and county level and not only at the national level. We need to ensure local authorities will drive this change and we need to put in place a comprehensive strategy to provide that all policies locally will be examined from a green point of view. Every planning application should be vetted for carbon proofing and energy conservation, but that is not happening. We need such a strategy as a default system in local government whereby when an application is submitted, it is examined specifically not only in terms of planning and engineering issues but in terms of climate change and energy conservation. We will ensure that every local authority will conduct a full inventory of CO2 emissions and then produce a plan of action to reduce them.

Part of the problem is that the emissions trading scheme rightly deals with the major polluters but nobody deals with all the other people who use energy. There is no focus on light industry, schools, hospitals, shops, other sections of the economy and areas of our life where these changes must be made. Fine Gael will insist that local authorities will consult all those businesses which are outside the scope of the emissions trading scheme, inquire of them their plans to reduce energy usage and request that they report within a year on what changes they will make.

My party will advise people on the best way forward and on best international practice to address climate change. We will encourage the adoption of best practice to deal with climate change, even as a benchmark as to what people can and should do.

Who is going to schools and pointing out to teachers that they have a unique opportunity to influence young people in this respect? Dealing will climate change can be driven in the school curriculum. The Minister could advise the Minister for Education and Science that he wants this issue included as a core subject under the SPHE or some other heading to ensure climate change is addressed. Nobody is doing that. People are talking about that but no action is being taken. The Minister should ensure that bodies such as hospitals and Government Buildings are approached to establish what is being done to address climate change and how such necessary change is being driven. The Minister should discuss this issue with officials in other Departments. He should make a start with his ministerial colleagues and inquire of them the cars they drive, the level of emissions for which they are responsible and how will they lead in introducing the change that is required. That is what must happen. When carbon proofing and energy conservation policies are at the core of all activities throughout the country, then we can say we are dealing with climate change. We can then say that if we do not meet our targets, we can explore the alternative the Minister has put forward in this Bill and we can consider purchasing our carbon credits abroad.

The reality is that the Government has failed. According to an article in The Irish Times, Ireland is not doing enough to reduce gas emissions. Notwithstanding what the Minister said, under the protocol the Taoiseach has been told we are not doing enough to deal with our emissions. From reading an article on the European website, I understand that mandatory limits will be imposed for 2012 onwards. Therefore, it is time to get our act together. It is not the case that by our actions we will save the world or destroy it, but at the core of the Minister's thinking is a failure to acknowledge that individual responsibility must be taken by all of us to deal with it. His comments were supercilious and do not make much sense.

It is time to introduce the change that is required. We on this side of the House will lead such a change strategy, if the Minister cannot. He needs to put in place a policy that is at the core of people's lives and of local government and that is driven by local government, which must be given the necessary new powers to take control, carry out audits and ensure everybody is consulted and complies, if they can, with such policy.

Santa Monica in California has an attractive policy in leading such change. However, in Ireland nothing is happening in that respect. Speeches are made, we have credits and the ETS, but nobody is moving in the direction of bringing about individual change. The Minister is not driving that agenda and that is his biggest failure and a massive failure of the Government. The country is crying out for it and people want leadership. We will provide it on this side of the House. The Minister's speech was poor on vision. He needs to go back to the drawing board. He needs to re-examine his approach and base it on best practice in this area worldwide. He needs to change matters but he is not doing that. That is the biggest regret of all.

The Minister made it clear in his speech and I will make it clear in my contribution that we in Fine Gael support the concept and principle of the Kyoto Agreement. There are three options in terms of meeting our commitments to the Kyoto Agreement. We can introduce tax, reduce emissions and use the emissions trading scheme and carbon credits. We accept that must happen. I support the principle of the Bill that we must have that as an option. It may be cheaper to do that rather than close an industry. The Minister referred to the cement industry. I am sure cement could be imported from other countries in the world and, if that happened, our factories in Limerick and Drogheda might close. That could happen. I do not want that to happen nor do I believe does anybody else.

Dick Roche (Wicklow, Fianna Fail)
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The Deputy is right. If that happened, there would be a higher level of emissions.

Fergus O'Dowd (Louth, Fine Gael)
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Yes, because the country would not be using the best available technology and I understand that issue. This is not a personal issue for me, it concerns the other 109 industries, irrespective of where they are located. Buying carbon credits must be a last option.

I support the principle of the Bill, but I am extremely critical of the progress in this area made to date. I will be happy to debate amendments to it on Committee Stage.

Eamon Gilmore (Dún Laoghaire, Labour)
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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.

Dick Roche (Wicklow, Fianna Fail)
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On a point of order——

Eamon Gilmore (Dún Laoghaire, Labour)
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I have limited time. The Minister can speak when he is concluding. Over the past ten years, this Government has built 500,000 houses and missed an opportunity to maximise energy conservation. Instead of implementing the EU directive on the energy rating of buildings, the Government has sought a derogation for three years. Over the past ten years, EU policy on agriculture has changed, as has the practice of agriculture. Instead of paying farmers to produce nothing, farm supports could be used to encourage and support farmers to produce the raw materials for bio-fuels. It would be better for farmers, better for the environment and better for the taxpayer. Instead of closing down the sugar factories and allowing them to be sold off to property developers, they could be converted to the production of more bio-fuels.

Why do we not have a decent grants scheme for improving the energy efficiency of homes, schools, and all our older buildings? Given the dispersed nature of our settlement pattern, why do we not use the country's roof space to capture solar energy in greater quantity? We are making some progress with wind energy, but given the size of our maritime area — we own almost ten times more sea than land — why are we not leading the world in developing wave energy?

Given the Government's apparent belief that the market is the answer to everything, why has the market not been set to work more effectively to cut down carbon emissions? Where are the tax incentives so favoured in every other area of economic endeavour? Why is there no system of green tax credits to encourage energy conservation and incentivise carbon reductions, cleaner technologies and a cleaner environment? Members can imagine what €750 million in green tax credits could achieve, but the Government intends simply to get the taxpayer to pay for its failure to get it right on Kyoto.

The carbon fund will be used to buy carbon credits from people elsewhere in the world who are too poor to put carbon into the atmosphere themselves. Taxpayers' money will be used to buy carbon credits from that quarter of the world's population who are too poor to have electricity, in order to facilitate us to continue to keep SUVs pumping out poison along the Stillorgan road. We will buy the right to have air conditioners from people who are too poor to have an electric bulb or fridge or even the food to put into it. This practice represents environmental imperialism. It is the 21st century equivalent of the practice whereby corn was shipped from our shores while people starved during the Famine. We are now the ones shipping the corn and buying up the carbon. Hunger and poverty are no less painful in Africa now than they were in Ireland 160 years ago.

The Labour Party does not oppose the Bill because we have a principled objection to the establishment of a carbon fund, but because it is almost ten years too late. While we recognise the fund as a perfectly legitimate element of the Kyoto package, it is obvious the Government intends to take advantage of it to pay for its mistakes and failures on climate change. We oppose the Bill because we want to alert the Irish people to the enormous price they will yet pay for bad and wasteful Government over the past ten years. When historians look back at today to wonder at and regret the missed opportunities, they will ask why in the best of times Ireland was cursed by a wasteful, incompetent Government which had no vision and was unable or unwilling to harness the country's economic success for the social and environmental well-being of our people. Nowhere have the Government's failures been more evident than in the crucial area of climate change.

This is the time of year when we all turn our eyes to the polar cap. While there still is a polar cap and before it melts away, and Santa has to be transported by paddling his canoe rather than by sleigh and reindeer, I take the opportunity of wishing a happy Christmas to the Minister, his officials, the Leas-Cheann Comhairle and Members of the House.

Trevor Sargent (Dublin North, Green Party)
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Tá mé ag roinnt mo chuid ama leis an Teachta Morgan.

This is an important debate. The fact it is coming at the end when quite a number of Deputies have probably headed for the hills is unfortunately symptomatic——-

Dick Roche (Wicklow, Fianna Fail)
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In their SUVs.

Trevor Sargent (Dublin North, Green Party)
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Perhaps in their SUVs indeed. It is symptomatic of an attitude problem and also a disingenuous approach by the Minister. He says, on the one hand, the matter is very serious and we have to deal with it, but on the other that it makes no difference if we do not because Ireland is quite a small country.

Dick Roche (Wicklow, Fianna Fail)
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I do not order the business around here.

Trevor Sargent (Dublin North, Green Party)
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The Minister has to recognise that morally, as well as economically and environmentally, there is a responsibility on this country which others will watch carefully. They know that relative to other countries Ireland performs atrociously when it comes to climate change. The US, we know, is internationally the worst offender. Next, in terms of per capita emissions come Australia, New Zealand and then Ireland. When we describe ourselves as being part of the European project and so forth, we are at about twice the EU average as regards carbon emissions. That is shameful for Ireland. On the other hand, we try to present Ireland as a clean and green country. Long may that brand work for us, but it is not helped by the reality of our climate change failure. When the Minister says ours is a small amount of carbon dioxide in relation to global emissions, it is worth bearing in mind calculations which have found that perhaps 20 hours could be the equivalent of Ireland's emissions per year. That is close to a day. We have one day a year, and perhaps it is today, given that this is the day on which the Dáil has ordered its business to deal with climate change and the carbon fund.

Dick Roche (Wicklow, Fianna Fail)
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If the Deputy does his sums he will find that is a grotesque exaggeration.

Trevor Sargent (Dublin North, Green Party)
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These are not just my sums and we can talk about this afterwards, if the Minister wishes. I am putting in perspective that there is, first and foremost, a moral responsibility rather than arguing about how much it is. The bottom line is that we are failing in terms of our commitments. We are obviously hanging a great deal on the aspect of the Kyoto package which states that carbon trading is legitimate. However, it was seen as a supplement to the actions which were to be taken domestically, not a primary part. That is why this Bill has to be rejected because certainly the budget presented the €270 million carbon trading package as the foremost central big idea coming from this Government. That in itself is to abuse the understanding arrived at in Kyoto.

I take the point made by Deputy Gilmore about the imperialistic aspect of other countries who are told they may continue so long as we pay for our business as usual. Of the 500 projects mentioned in Nairobi, my colleague, Deputy Eamon Ryan, who was there just before the Minister, found that two of them were in Africa.

Dick Roche (Wicklow, Fianna Fail)
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As a courtesy he was on the official delegation.

Trevor Sargent (Dublin North, Green Party)
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I thank the Minister for that. I am just saying he was getting the information there, as I am sure the Minister was. To give the impression that all this money is going to Africa to save people there from starvation is untrue. It seems that eastern and other parts of Europe are doing quite well.

Dick Roche (Wicklow, Fianna Fail)
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Just to be helpful to the Deputy, he is quite right in saying that the €20 million that is being spent is in eastern Europe.

Trevor Sargent (Dublin North, Green Party)
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I want to correct any impression that might have been given that this is all heading for Africa. It is very important we go beyond this legislation, which is sending out the wrong signals. It is quite irresponsible economically, in that it is presuming that we will buy carbon credits for perhaps €10 or €15, or maybe €20. It is a flexible and fluctuating situation. The Stern report, however, suggests we could be looking at $85 per tonne of carbon dioxide. The Minister can nod his head as much as he likes, but I do not see him deciding the price. The Minister has given much credit to the Stern report and I agree it is an important breakthrough study. If Stern is saying $85, then we need to take it seriously.

Dick Roche (Wicklow, Fianna Fail)
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Just to correct the Deputy——

Trevor Sargent (Dublin North, Green Party)
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That is what Stern says it will be. I am not deciding this, and neither is the Minister. I want him to bear in mind that he may be coming at this from a completely different viewpoint from the reality. We need targets and that is something the Minister failed to accept from the Green Party when it put forward its climate change targets Bill 2005, the first legislation in this regard. That would have meant that year by year we would commit ourselves to reductions, which would give a clear signal to business in particular as well as to every citizen to recognise that graduated reductions would be made each year. Our reductions need to be well below what the Minister or even the European Union is considering, and that is coming from the Stern report as well.

The message to business is very mixed, when the Minister talks about €270 million for a carbon fund and just €14 million for bioenergy growers. A clear lack of priority is attached to measures in this country that would save us from having to pay for a carbon fund. This is part of a much larger picture. Reference was made to the Arctic and melting ice caps, but this is also an enormous opportunity. The imagination, as well as the planning needed for this just seems to have passed the Minister by. We are talking about rising sea levels, melting ice caps and enormous refugee problems which the United Nations High Commission on Refugees has not even begun to acknowledge — because this is an environmental issue and it only deals with political refugees. A major blindspot exists regarding the impact on Ireland, which I believe will relate primarily to refugees, first and foremost, before we feel the impact of rising seas. That is something which I believe this Government has not even countenanced.

The Stern report understood competitiveness. Even though the Minister says he wants to keep business competitive, he is genuinely missing the point as to how to do this in a climate of a low carbon economy. In many cases this is not the companies that are feeding the Fianna Fáil Party as well as the Celtic tiger, such as the large construction firms that manage to get away with low insulation norms and high energy use as a legacy from their work. It is the companies that are striving to set up off-shore wind farms and to develop geothermal and solar power and other aspects of the 21 renewable technologies. At the same time they are being faced with quite a number of cowboys in the sector because the Government has not introduced an adequate regulatory framework to require registration of trained people and provide the training required. I have experienced this myself as I had solar panels installed that were put in incorrectly. I must spend more money to rectify it because people are allowed to get insurance and simply carry on. While they pretend to be experts, one finds out in the long run. Of course such operators claim that one will recoup one's money in ten to 15 years, by which time they have fled. This is a perfect recipe for a cowboy operator. The Minister has a responsibility to clamp down in this regard, in order that the basic renewable technology sector does not find itself dragged down by people with low standards. Regrettably, this is happening at present. The Minister should deal with it.

Dick Roche (Wicklow, Fianna Fail)
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The Deputy should send me the details. He should have gone to an SEI-registered contractor.

Trevor Sargent (Dublin North, Green Party)
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While the Minister may say that, even an SEI-registered contractor is not obliged to have the training required in other countries. The Minister must deal with this problem.

Dick Roche (Wicklow, Fianna Fail)
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The Deputy should send me the details.

Trevor Sargent (Dublin North, Green Party)
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The signals being given out to the effect that this is somehow acceptable are bad for both business and Ireland. It is no different to Neville Chamberlain returning from Germany before the Second World War waving a piece of paper saying people should not worry, it is not such a major problem, it is only a small country and peace in our time. The phrase, "the Minister ain't seen nothing yet" is apposite and this situation must be dealt with greater seriousness than that with which he has started.

Arthur Morgan (Louth, Sinn Fein)
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I take this opportunity to wish the Leas-Cheann Comhairle and everyone in Leinster House a happy Christmas. I also wish everyone well in the new year. Some of the Minister's comments, in at least part of his speech, were designed specifically to try to enliven the debate. There could be no other reason because some of it bordered on the nonsensical.

During his budget speech last week, the Minister for Finance, Deputy Cowen, was at pains to give the impression that the environment is a priority for the Government. It is a pure stunt for the Minister to try to convince Members that the purchase of a further €270 million worth of carbon allowances constitutes an environmental measure. This is a cost that taxpayers should not be obliged to bear. Had we acted to cut emissions, we would not be forced to purchase such allowances. Ireland should be aiming beyond the Kyoto targets, which merely represent a minimum level with which all states should comply.

The Minister asserted that the squandering of €270 million was ethical. Perhaps this is the case, particularly at this late stage. However, the Government's complete lack of action for many years to prevent carbon emissions, thereby getting us to this position in the first place, is unethical. The Government claims it is working to meet the environmental pressures and to improve the quality of our environment. However, this has not been demonstrated and it must act now to implement immediate measures to combat the damage being done to the environment. Members should consider the example of announcing a motor tax related to emissions in the budget. However, this measure will not come into force until 2008 and Sinn Féin calls for it to be implemented immediately. Were the Minister serious about this issue, he would do so without waiting for 12 months.

Only a fortnight ago, the European Commission reduced the allowances under the EU emissions trading scheme by almost 7% below the emissions proposed in the national plans produced by ten member states for allocating carbon emission allowances to energy-intensive industrial plants for the period in question. The Commission sought a 6.4% decrease in Ireland's proposed allocations, as it expects transport emissions to increase at a faster rate than expected. Everyone, apart from the Government, accepts this. The Commission also found the State had not made sufficient progress in its arrangements for Government purchases of allowances under the Kyoto Protocol. Had the Government done this earlier, it would not be necessary to rush through this legislation, for which Members do not even have time for a proper debate.

The €270 million being thrown by the Government at this carbon fund initiative is a complete waste of funds. While it may be necessary, it constitutes a waste. At least some of these moneys could have been used to incentivise industry in order that it did not produce as many harmful and toxic emissions. Moreover, it also could have been invested in public transport. Not only is such investment much needed, it would in turn remove more cars from the roads and reduce carbon emissions greatly.

Real investment in pollution prevention, environmental health measures and sustainability are essential for Ireland's population. The Government must introduce policies and legislation that seek to minimise or eliminate the release of any pollutant that causes environmental damage. It must introduce legislation that will compel industry and commercial producers of waste to reduce waste production in a planned, targeted and accountable manner.

The Government is trying to paint a picture suggesting that carbon funds are the answer to all our problems. It is time for it to wake up. Ireland should be aiming beyond the Kyoto targets, which merely represent a minimum level with which all states must comply. The Government must build on the Kyoto Agreement, strengthen its positive points and commit itself to greater emissions cuts after 2012.

I look forward with interest to the change in the Kyoto Protocol that will force governments to take action. Clearly, this voluntary scheme has not worked. This is particularly true in Ireland's case, as other states at least have made some efforts to take that path. However, this State has turned a blind eye to dealing with the issue of trying to prevent emissions. While the Minister may be nodding, what measures has he adopted? Is there any evidence he has taken any action in this regard?

Dick Roche (Wicklow, Fianna Fail)
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I will give my response during my reply.

Arthur Morgan (Louth, Sinn Fein)
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There is no evidence whatsoever.

Séamus Pattison (Carlow-Kilkenny, Labour)
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The Deputy should conclude.

Arthur Morgan (Louth, Sinn Fein)
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Although the Minister has turned his face against it again, Members have suggested many times that taxes and incentivisation are crucial areas. However, he has completely omitted them.

Séamus Pattison (Carlow-Kilkenny, Labour)
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The Minister has five minutes in which to respond.

Dick Roche (Wicklow, Fianna Fail)
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I was not aware the debate would conclude this evening. My understanding is that a fuller debate will be allowed. I hope this is the case.

Arthur Morgan (Louth, Sinn Fein)
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That is correct. The debate should adjourn.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Is another Member offering to contribute?

John Cregan (Limerick West, Fianna Fail)
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Yes.

Dick Roche (Wicklow, Fianna Fail)
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Deputy Cregan is offering. I beg the Leas-Cheann Comhairle's pardon.