Micheál Martin (Cork South Central, Fianna Fail)
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Question 1: To ask the Taoiseach the way the commitment in the programme for Government of making Ireland a leading player in the global carbon market and a centre of excellence in the management of carbon can be achieved; and if he will make a statement on the matter. [34010/11]

Enda Kenny (Mayo, Fine Gael)
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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.

Micheál Martin (Cork South Central, Fianna Fail)
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I would like to award an A-plus to the composer of that reply because there is a lot in it. Any analysis of the IFSC would indicate that in order to maintain the enormous progress that has been made over the last 20 years, and to consolidate and expand the activities at the IFSC, higher level activities need to be introduced in addition to diversification. The green IFSC was a proposal initiated under the last Government, as the Taoiseach outlined, to try to give added dimension and value to the activities there. With the job losses in Aviva and a fear that there can be a degree of migration of certain jobs from the IFSC in future, there is a need to bring different functions that can bring different jobs to the IFSC. In the context of the green IFSC, have any specific recommendations emerged from the feasibility study, which Government could implement and provide for either in the context of the forthcoming budget or in the context of developing the reality of a green IFSC on the ground?

It is my understanding that the Cabinet sub-committee on climate change has not been re-established by the new Government. Therefore, there is no Cabinet sub-committee on climate change, as such. Can the Taoiseach confirm that? If that is the case, I ask him to reconsider the establishment of such a sub-committee because climate change is a fundamental issue that will continue to affect the world, including Ireland. The importance of the Cabinet sub-committee on climate change is that there is an inter-departmental approach to it. One can have various sectors contributing to that process, so that everybody has a clear understanding of the challenges that lie ahead. The fact there is no longer a Cabinet sub-committee acting on climate change, and Minister Hogan's decision not to proceed along sectoral lines in terms of climate change, all adds up to a certain disregard for the issue itself. No matter how much certain politicians might think so, it will not go away. I get a sense from the current Government that it is not taking the issue of climate change seriously enough.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I remind Deputies that this is Question Time, so I would appreciate it if they could confine their remarks to questions as distinct from statements.

Enda Kenny (Mayo, Fine Gael)
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I can confirm for Deputy Martin that the Cabinet sub-committee on climate change did meet on 30 June. It was to meet on 19 October but for a number of reasons that could not happen. As Deputy Martin is aware, green finance refers to capital markets, investment banking activities and related advisory services that support the development, financing and promotion of a low-carbon economy. The group to which I referred has not reported back yet. The value of carbon as a pricing mechanism for the activity of renewable energy generation and energy efficiency and, in the wider context, water, waste and weather management is an issue which is at the core of green finance. The Green IFSC Steering Group has identified that central role in carbon markets as being pivotal to the success of the initiative. The IFSC is part of the IDA Ireland International financial services portfolio, which comprises about 150 global companies with a range of activities employing over 20,000 people. I can assure the Deputy that vigilance is being kept in this regard. The clearing house group dealing with the IFSC and green finance is chaired by the Secretary General of my Department. The first meeting of that group is due to take place shortly.

The Minister for the Environment, Community and Local Government, Deputy Hogan, has direct responsibility for climate change in a broader sense. He has made it clear that he wants to meet the Kyoto targets. We will do so. There must also be a rational and pragmatic discussion about policy change before committing to legislation that would come from such a debate in which everybody can participate.

Micheál Martin (Cork South Central, Fianna Fail)
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Has there been a specific recommendation from the feasibility group on the green Irish Financial Service Centre, IFSC?

Enda Kenny (Mayo, Fine Gael)
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The group has not reported yet.

Micheál Martin (Cork South Central, Fianna Fail)
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I thought the Taoiseach had said the feasibility group had reported.

Enda Kenny (Mayo, Fine Gael)
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It is due to report shortly.

Joe Higgins (Dublin West, Socialist Party)
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In all seriousness, does the Taoiseach not see the glaring contradiction between wanting genuine and effective action to reduce pollution - if we take carbon as pollution - on the planet but relying on wild speculation in pollution credits on the world's financial markets as a method of achievement? Does the Taoiseach agree that his own programme for Government and the words he just used indicating that Ireland would become a centre of excellence in the management of carbon, or pollution, and that Ireland would become a leading player in the global pollution market are two diametrically opposed ideas? They are mutually exclusive. Does the Taoiseach find it incredible that carbon credits - or the licence to pollute - are the subject of massive speculation by hedge funds and other sharks in the financial markets? It is beyond belief that the same institutions, made up of sharks and charlatans, which brought the economies of the West to destruction over the past three years as a result of wild financial gambling, are entrusted with this method allegedly to reduce pollution?

Is the Taoiseach aware that in the European Union, reports have indicated that carbon trading has been a dismal failure in reducing pollution and carbon credits are grossly oversupplied, allowing polluters to purchase them cheaply and to continue polluting? The price paid by the consumers has the cost of the credit included. Is the Taoiseach aware that in the European Union there has been massive fraud in pollution credits speculation, as European taxpayers have been swindled out of billions of euro by fraudsters in this so-called market? Will the Taoiseach change the policy, going with his first path of excellence in reducing pollution and environmental management? He should not pursue the mad methods of the markets.

Enda Kenny (Mayo, Fine Gael)
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I indicated to the Deputy that the initiative seeks to build upon the reputation of the IFSC as a leading global financial centre, developing Dublin as a global hub for green finance. I outlined the areas where green finance would be of importance and priority. The national policy has been laid out since 2000 and 2007, with the most recent strategy focusing on the measures that would be required to achieve compliance with the first commitment period of the Kyoto Protocol and on research and development of the measures necessary to reach the targets for 2020. As I indicated to Deputy Martin, Ireland is on course to meet its Kyoto targets through a combination of domestic emission reductions, supplemented by the use of carbon units, including units acquired through the protocol's flexible mechanisms.

Micheál Martin (Cork South Central, Fianna Fail)
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As well as the recession.

Enda Kenny (Mayo, Fine Gael)
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Ireland has very challenging emissions reduction targets covering the eight years from 2013 to 2020 in the sectors of the economy which are not part of the European emissions trading sector. The Minister for the Environment, Community and Local Government published a review of national climate policy on 3 November, signalling an intention to set out a roadmap for national low carbon ratings. That will provide an opportunity to present a vision, at least for the period up to 2050, in which climate policy must be mainstreamed across every policy area. The Minister announced that an independent study would be carried out by the secretariat to the National Economic and Social Council to inform that policy position and he also initiated a public consultation which will take place in 2012, involving all interested parties.

The provisional figures released two weeks ago by the Environmental Protection Agency show a welcome drop in the total national greenhouse emissions levels in 2010, but there can be absolutely no misunderstanding about the scale of the challenge facing us in the years ahead. I am not aware of the nature and extent of the fraud that Deputy Higgins refers to and how the European Parliament is acting. I am sure the audit committees will consider the matter closely.

Gerry Adams (Louth, Sinn Fein)
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I agree that climate change and its consequences is probably one of the biggest challenges facing humanity at this time. The Taoiseach may be correct in saying that Ireland is on course to meet the Kyoto targets but currently Ireland's emissions are still above those targets. The production of carbon is a major factor in that respect. How much of taxpayers' money has been spent buying carbon credits?

Enda Kenny (Mayo, Fine Gael)
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I do not have that figure but I will endeavour to find it for the Deputy in so far as it is relevant and up to date.

Gerry Adams (Louth, Sinn Fein)
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Going beyond the rhetoric we need to pursue clean energy projects. There is much sense in the comments of Deputy Higgins. I look forward to receiving that information from the Taoiseach.