James Bannon (Fine Gael)

In thinking about the Carbon Fund Bill I have a mental picture of the Government as a large, disgruntled ostrich with ruffled feathers reluctantly removing its head from the sand because of an assault to its exposed rear end. By this I mean no disrespect to the ostrich.

This is exactly the position of the beleaguered Government, facing continuous assault on its very exposed position vis-À-vis carbon emissions. What exactly is its response to the criticisms and outcries but to throw money at the problem, of course. This is the Government that has had more money at its disposal than any other in the history of the State and its knee-jerk answer to most problems has been to throw taxpayers' hard-earned money at them.

I believe Rupert Murdoch stated that the person who holds the cheque book calls the tune. The Bill before us is calling the tune and asking us to dance to it. It is telling us to endorse the cheque to buy the Government out of the mess it has made with regard to carbon emissions and to save it from failing to meet our commitments under the Kyoto Protocol.

There should be no mistake, this Bill is not a solution to our appalling record on carbon emissions but is rather the forcing of our hand to rescue the Government from a major mess of its own making. It is testament to the total lack of action taken by the Minister for the Environment, Heritage and Local Government, as well as the Government as a whole, over the last decade on carbon emissions.

The behaviour of the Government and the contempt in which it holds this House by scheduling this legislation in the dying days of this Oireachtas term is appalling. The Minister and his colleague, the Minister for Finance, Deputy Cowen, have trumpeted this Bill as bold, radical and, amazingly, "best for the environment and best for the economy". They forgot to say it is best for the dying Government.

In his press release at budget time, the Minister for the Environment, Heritage and Local Government welcomed the budget's commitment to long-term funding of €270 million for Ireland's planned purchase of carbon allowances. He continued by stating, "This budgetary commitment underlines Ireland's support for the Kyoto Protocol and to developing countries. It provides us with the means to meet our Kyoto target, without damaging the Irish economy."

The public is being deceived, as it is wrong to say the Bill is of economic benefit to the people or the economy. It is the product of an economic and environmental systems failure in the Minister's Department. We are paying for the failure to tackle carbon emissions during the past ten years. Nowhere is that failure made clearer than in the report from Sustainable Energy Ireland, which showed CO2 emissions from energy production increasing at a higher rate than energy growth. The recoupling of CO2 emissions to energy growth is phenomenally worrying and shows that the Government's approach to climate change is wrong and that a new aggressive approach is needed.

In 2005, Ireland's greenhouse gas emissions were approximately 70 million tonnes, representing a rise of 26.3% since 1990 and seven tonnes above our annual Kyoto target for the period 2008-12. The European Commission believes Ireland will not meet its target. As such, Ireland will need to use the Kyoto mechanisms to meet the overspill. The Government has committed to purchasing 3.6 million tonnes of carbon credits annually in the period 2008-12. Even with these carbon credits, Ireland is not expected to meet its target without further measures. Ireland is one of seven EU-27 countries not projected to meet their targets. The others are Austria, Belgium, Denmark, Italy, Spain and Portugal. Even with the use of Kyoto mechanisms and carbon sinks — planting permanent forests — the European Commission expects the gap to be approximately 3.6 million tonnes per annum.

This month, the EU committed to reducing greenhouse gas emissions to at least 20% below their 1990 level by 2020. If other developed countries agree, this target could be increased to 30% and more than 60% by 2050. It is unclear at this stage what this means for Ireland in terms of a national target, but it should mean that Ireland will need to reduce its greenhouse gas emissions to below 1990 levels by 2020 and further after that time.

Currently, Ireland has one of the highest greenhouse gas emissions per capita in Europe. If these levels continue, Ireland will continue to need to buy carbon credits from lower emission countries. While the current cost of carbon is low, partially due to overly generous allocations within the European trading system, the price may rise and, without emission reductions, the cost of purchasing carbon credits will be an ongoing burden on the taxpayer. According to the Government, the difference between Ireland's level of emissions per capita and the EU-25 level can be attributed to, among other factors, a high reliance on fossil fuels for power generation, high per capita cement production and a relatively high level of international fuel storage.

Late last year, the European Commission criticised the Government's climate change plan for its heavy reliance on purchasing carbon credits, but the Government's response was to place further reliance on this policy in the budget. Its failure to tackle vehicle emissions is unforgivable and the Minister for the Environment, Heritage and Local Government's botched adoption of Fine Gael's VRT plan has provided a 12-month window for a significant increase in sales of vehicles that emit considerable amounts of CO2. Most damningly, Ireland's over-reliance on oil and the lack of emphasis Fianna Fáil and the Progressive Democrats have put on alternative energy in the past decade has resulted in today's figures.

A brand new approach is needed, with aggressive policies focusing on reaching local targets to reduce overall emissions. Fine Gael in government will give significant new responsibilities to local government in respect of climate change and energy conservation. We will put in place a comprehensive strategy that will make local government integral in all green policies and will see every planning application vetted for carbon proofing and energy conservation. Each local authority will be compelled to conduct a full inventory of CO2 emissions and produce a plan of action to reduce them. Targets will be set in each local authority area requiring a percentage of each new home to come from renewable sources and there will be a serious drive on green procurement.

I wish to put on record the facts regarding the cost of carbon trading. The national allocation plan of carbon allowances published by the Environmental Protection Agency on behalf of the Government has allocated 3 million tonnes of excess emissions to the non-traded sector and 2 million tonnes to the traded sector. This means that, in practice, the Exchequer — effectively, the people of Ireland — will buy 3 million tonnes of credits annually and the electricity consumer, those same people, will pay for two million tonnes. At €15 per tonne of carbon, the annual bill would be €75 million between the taxpayer and the consumer. However, the NAP is hoping for unspecified savings of 1.5 million tonnes in the years to come. If those savings are not achieved, they will need to be offset by the purchasing of more carbon credits. If the price of carbon were to increase to €30 per tonne, which is not an unreasonable suggestion, the national bill would be a staggering €213 million per annum. That is the cost of failure. During the five years of the NAP, the total bill would come to more than €1 billion.

Last December's budget paid lip-service to the need to end Ireland's unsustainable dependence on foreign oil and will do little or nothing to help Ireland meet its Kyoto commitments. Thanks to the lack of any political will from the Government, Ireland's CO2 emissions have risen by almost twice the allowable level under the Kyoto Protocol since 1990.

I welcome the Government's use of Fine Gael's policy to reform vehicle registration tax——