Joan Burton (Dublin West, Labour)
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Question 80: To ask the Tánaiste and Minister for Finance the action he will take to meet the budgetary cost of the proposed revision of the EU emissions trading scheme as set out by the European Commission; and if he will make a statement on the matter. [2388/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The proposals published by the Commission begin the process which will lead to an agreement on the contributions of individual member states towards meeting the EU targets agreed at the 2007 EU Spring Council. The Commission's proposals require Ireland to reduce its greenhouse gas emissions by 20% by 2020, based on 2005 emissions figures and achieve an overall target of 16% of final energy consumption from renewable energy by 2020.

The proposals set out by the Commission are complex and far reaching and go beyond changes to the emission trading scheme. They require detailed analysis and discussion at EU and domestic level and my Department will be central to this process. The cost in budgetary terms and the economic impact will depend on the methods used to achieve whatever target is finally set. We will try to be as fiscally neutral as possible.

The Government fully supports the objectives agreed at the EU Spring Council last year and the leadership shown by the EU's ambitions in this area of climate change. It is important that national circumstances and competitiveness impacts are considered. In this regard it is essential to ensure that the Commission's proposals adequately take into account the Irish situation with regard to the large difference between our gross domestic product and gross national income, our infrastructural deficit, our recent and projected levels of population growth and the relatively large size of the Irish agriculture sector and its global competitiveness.

It is important, however, to look positively on the challenge and not just dwell on the negatives. To the extent, for example, that extra capital spending generates fuel and other efficiencies in using natural resources this will be to our overall economic and fiscal benefit. The proposals for the emissions trading scheme also involves new revenue streams for national governments which will also form part of the policy mix.

As I outlined in my Budget Statement this is a challenge for all citizens and not just the Government and will involve choices being made and changes in behaviour to realise the ambition of reducing greenhouse gas emissions. The Government has been acting over recent years to begin to address the challenge of climate change and we will continue to work towards reducing emissions.

Joan Burton (Dublin West, Labour)
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Does the Tánaiste accept the widely-held view that the EU proposals will probably result in costing Ireland €1 billion per annum? How will this be done without very significant increases in the price of electricity and fuel? Is he proposing to contribute to the emissions trading scheme in order to buy our way out of this and that consumers and business will pay those costs? Where is the evidence that we will meet our renewables target of generating 16% through renewables in any serious way? It is all small pilot schemes. What is the Tánaiste's approach to this matter? It seems the Government and, in particular, the Tánaiste, took their eyes off the ball and did not make the point to Brussels that our calculation of GDP is heavily influenced by the fact that Ireland has so much American investment and profit repatriation and that our very welcome growth in GNP and in wealth is relatively recent. We will be clobbered because it will be based on wealth and on ability to pay. On the other hand, eastern European countries in the EU which have heavily polluting industries left over from the old Soviet era will be dealt with much more favourably than Ireland. Will the Tánaiste be wearing the Irish jersey when he goes to Brussels to look for a better deal for Irish consumers and businesses? We are all in favour of reducing our carbon footprint and not being "Bigfoots", but we need to do it in a way that takes into account the realities of this island and what has not happened on climate change measures here.

Brian Cowen (Laois-Offaly, Fianna Fail)
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It is important to point out that we are at the start of a process here rather than at the end of one. We have proposals from the Commission and we are anxious to ensure it is a fair and transparent system that provides a fair measure of burden-sharing consistent with the criteria that have been outlined. These targets are part of a number of proposals that were released last week but they represent the start of a process that may take some time. We are analysing the impact of those proposals from an Irish perspective and this process is being mirrored in all other member states as well.

As with other finance Ministers, I have concerns about any initiatives that increase costs. However, this must be balanced by the findings of the reports produced by Stern and the IPCC that long-term costs of inaction may be substantial and hence the need to act. However, we have to be still mindful that there are also substantial economic and fiscal implications for the implementation of policies to tackle and adapt to climate change. Our challenge is to ensure that the transition to a low carbon economy is handled in a way that is consistent with competitiveness, supports sound and sustainable management of public finances and contributes to broader growth objectives.

At this stage we have not completed our assessment of the domestic impact of the Commission's proposals. While the Commission has modelled some scenarios on the basis of their proposals, we do not have the detail behind those calculations. In any event, much depends on what measures we as a country take in the future and what will be the policy mix. Long-term economic forecasting, of its nature, is imprecise and projections have to be treated with caution. The Commission indicated that there would be costs in terms of investment but that these would vary with the measures chosen and would fall on a wide variety of players in the economy. In addition, the forecast for any possible reduction of GDP by 2020 is indicative only. To bring about the reductions will mean choices being made and it will be a matter for all citizens to play a part.

We will robustly test the proposals coming from the Commission to see whether they represent a fair and transparent process in so far as Ireland is concerned. We will bring particular Irish considerations and circumstances to the Commission's attention.

As regards the emissions trading scheme, it is part of the process. It is often suggested that in some way it is an illegitimate part of the process but it is a legitimate means by which burden-sharing can be efficiently handled by way of buying carbon credits from countries where there is not the same problem. It is a question of finding a mix in terms of all the mechanisms that are available to us and this represents a serious challenge.

Joan Burton (Dublin West, Labour)
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Now that the Tánaiste has received this report, does he regret that in the budget in December he put so little emphasis on public transport investment in the here and now, not in 2016 and 2020? Almost all the emphasis in the budget on transport investment was in regard to roads, with public transport in the here and now getting very little. We do not have enough buses, trains or carriages. That is how we will reduce our emissions. Our transport emissions are among the ones that have risen at the greatest level. If the Minister had the chance to rewrite the budget, would he give a little more to public transport?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I find it ironic coming from a Deputy who was a member of the Government in the mid-1990s whose public transport budget in 1996 was zero. Not a bob was given to public transport.

Joan Burton (Dublin West, Labour)
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Mr. Todd Andrews closed most of the railways, if the Tánaiste wants to go into——

Brian Cowen (Laois-Offaly, Fianna Fail)
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We are not talking about Mr. Todd Andrews and Harcourt St. That was long before my time and Deputy Burton's time.

Joan Burton (Dublin West, Labour)
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——political archaeology.

Brian Cowen (Laois-Offaly, Fianna Fail)
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Does Deputy Burton want a political history lesson or to talk about the here and now?

Brendan Howlin (Wexford, Labour)
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It is time for the next reply.

Brian Cowen (Laois-Offaly, Fianna Fail)
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We are making unprecedented investment in public transport in the here and now. When the Deputy speaks of carriages, one must consider the number of new carriages that are now being provided on our trains, the number of Luas projects that are going ahead, and the detailed discussions I am having with the Minister for Transport on metro, metro north etc.

Joan Burton (Dublin West, Labour)
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Where is it?

Brian Cowen (Laois-Offaly, Fianna Fail)
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There are detailed plans in place.

Joan Burton (Dublin West, Labour)
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What about the promises regarding public transport to Swords?

Brian Cowen (Laois-Offaly, Fianna Fail)
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Interrupting does not take away from the point. The fact is that we are making——

Joan Burton (Dublin West, Labour)
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I thought the holidays would have made the Tánaiste better humoured.

Brian Cowen (Laois-Offaly, Fianna Fail)
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——an unprecedented investment in public transport. There is no comparison with our record and that of Deputy Burton when she was in Government.