Thursday, 1 April 2021
Department of Public Expenditure and Reform
101. To ask the Minister for Public Expenditure and Reform the way in which the new EU environmental taxonomy will impact on future procurement policy; and if it will be applied as an element in the current review of the National Development Plan 2018-2017. [17866/21]
The new EU Environmental Taxonomy is a classification system providing appropriate definitions on economic activities which can be considered environmentally sustainable to help the private financial sector to navigate the transition and shift investments to a low-carbon, resilient, and resource-efficient economy.
The Taxonomy will not, therefore, directly impact on public procurement policy. However, public procurement will play an important role in addressing the same objectives as the EU Taxonomy i.e. climate change mitigation and adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. In 2019, the Department of Public Expenditure and Reform issued a Circular to public bodies to promote the use of environmental and social considerations in public procurement. As set out in the Programme for Government, we will develop and implement a sustainable procurement policy during the lifetime of this government, to minimise the environmental impact of products and services procured and will mandate the inclusion of green criteria in all procurements using public funds. Furthermore, the Office of Government Procurement will update its procurement frameworks in line with green procurement practice.
The National Development Plan sets out the investment priorities that will underpin the successful implementation of the National Planning Framework. The current review of the National Development Plan is considering the following fundamental elements:
Level: There will be an assessment of the economic and social case for the overall level of capital expenditure commitment into the future.
Share: This element will consider the share of capital expenditure across Departments or sectors and the need to adjust Sectoral allocations in order to successfully deliver on Government priorities.
Priorities: This will ensure alignment with the policy priorities in the Programme for Government, notably housing, health, climate action, transport and job creation and enterprise development.
Spatial Alignment: This will investigate whether the NDP aligns sufficiently with the spatial strategy set out in the National Planning Framework of compact growth as well as city and regional growth targets.
Governance: The final key area will assess whether the structures and rules for the management, governance and oversight of projects are in place to deliver on the ambitions of the revised NDP.
Climate was an important consideration in the development of the current National Development Plan and is also in the ongoing appraisal of projects and programmes. However, in recognition of the need for systemic change, there will be an overarching focus on climate action throughout the new National Development Plan. It is intended that Departments will be required to assess their spending proposals/allocations against a range of environmental outcomes to ensure that their investment priorities are aligned with Ireland’s climate and environmental objectives. To complement this sectoral assessment of the National Development Plan, my Department is proposing that the whole of the National Development Plan is assessed against a suitable climate/environmental methodology which is line with international good practices.
It is important to note that the National Development Plan is not a vehicle through which investment proposals are approved. All project and programme proposals included in the Plan are subject to the detailed rigour of the Public Spending Code. The Public Spending Code is not static. It is updated regularly to reflect lessons learned and international good practice. My Department has an ongoing body of work to strengthen the Public Spending Code requirements and guidance to support public bodies in their evaluation, planning and management of capital projects. This includes strengthening the consideration of environmental and climate factors in project appraisal, planning and delivery. In particular, I anticipate altering the shadow cost of carbon that applies to all projects once the higher targets envisaged in the draft Climate Action Bill are adopted. This will ensure that the amount of emissions a project may give rise to is quantified and a value placed on those emissions that reflects the cost the society will have to bear to eliminate these emissions in the future. This in turn allows the appraisal to determine if this future burden outweighs any benefits the project may bring.