Thursday, 16 September 2021
Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Climate Change Policy
3. To ask the Minister for Communications, Climate Action and Environment the status of the process and timeline for the introduction and implementation of carbon budgets in view of the recent IPCC report; and if he will make a statement on the matter. [44108/21]
The recent IPCC report is an important statement on international science's understanding of the climate system and climate change. Its publication could not be more significant or timely. It details the increasingly dangerous future that is ahead of us unless action is taken by all of us now. The Climate Action and Low Carbon Development (Amendment) Act, which was passed in July 2021, requires the Government to adopt a series of economy-wide, five-year carbon budgets, including sectoral targets for each relevant sector on a rolling 15-year basis, starting this year. The next stage of the process will be the preparation of regulations and carbon accounting, in consultation with the Climate Change Advisory Council, CCAC, and consistent with the Paris Agreement and EU rules. This will be followed by the production of carbon budgets by the CCAC. These carbon budgets will be presented to the Oireachtas and then approved by the Government. The Government will then set sectoral emissions ceilings, determining how each sector of the economy will contribute to the achievement of the budgets.
In response to my previous question, the Minister mentioned the price of electricity and the issue of wholesale prices. I would also make the point that the public service obligation, PSO, levy and the carbon tax have direct implications for the cost of electricity for households. The Minister has an ability to address at least those measures.
I will ask about the timeline in respect of this question. I heard from the Minister earlier in the week that the new climate action plan will be announced in the coming weeks, likely in early October. What relationship does that have with carbon budgets? What is the timeline for the carbon budgets? They are significant outworkings of the climate action Bill and we want them to be considered.
I will make one comment on the point the Deputy made about the PSO and carbon tax. The PSO was always a protection, in a sense, against volatile markets. At times like this, when the price of gas is very high and the price of electricity is driven up, the PSO falls away and drops dramatically. The PSO is having the opposite effect. It is being taken out at the moment and that is reducing the price increase effect. It is doing what it was designed to do. It provides a floor at times when gas prices are low. When gas prices are high, the PSO drops. That is helping to cut prices or abate the cost increase. Similarly, the carbon tax we have does not apply to the electricity sector or the emissions trading system, ETS. The international price of carbon does apply but our own carbon tax system does not. That is having no effect on the electricity price increases we are seeing.
We are on a tight timeline because we want to include this year in our plans and we want to get as much done as we can before we go to Glasgow.
The Climate Change Advisory Council is expected to deliver its budget before this, and then we will respond with the revised climate action plan. We expect all that to take place in the first week in October.
Perhaps the Minister might comment on when we in the Houses of the Oireachtas might see the carbon budgets. Also, I ask him to reference the opportunity there will be for stakeholders to engage in the process and when they might have that opportunity.
On the broader question, and I am not entirely clear in relation to it, of the relationship between the fiscal, economic and climate objectives, are there conversations at governmental, ministerial and departmental levels as to how we are going to square all of that? My understanding is there is a McKinsey report that has not been published. Is that being factored into considerations? How are we going to align, because it is essential we do, the climate objectives with the economic and the social objectives?
As I have said, I expect the Oireachtas committee, the House and stakeholders to be able to see these carbon budgets when the Climate Change Advisory Council delivers them at the end of this month or the first week in October at the latest and then very much to get engaged. On the alignment between economic, social and environmental objectives, the way the Bill was passed was to allow for all stakeholders, particularly Members of the Oireachtas, to make their contribution and for us to debate within this House how we get that balance right. We will have to do that in terms of the sectoral targets we will set, the budget in terms of how we manage it, and the Common Agricultural Policy budget. We will then review it every year. There is an ongoing review of the climate action plan, which is an evolving and iterative plan, and the Oireachtas has a central role. The plan is to get that balance right.