Darren O'Rourke (Meath East, Sinn Fein)
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64. To ask the Minister for Public Expenditure and Reform the progress to date on the development of a model to assess the impact of infrastructure investment as contained in the 2023 Climate Action Plan; and if he will make a statement on the matter. [22187/23]

Darren O'Rourke (Meath East, Sinn Fein)
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65. To ask the Minister for Public Expenditure and Reform if he will report on the development of a model to assess the impact of infrastructure investment as contained in the 2023 Climate Action Plan; if a framework has been developed to consider and appraise investments that may be vulnerable to the impacts of climate change; and if he will make a statement on the matter. [22188/23]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 64 and 65 together.

The Public Spending Code is the tool that the Government uses to consider the costs and benefits of the capital investment decisions it faces. As part of my Department’s enhanced mandate around the delivery of the National Development Plan (NDP), I recently announced that the Public Spending Code will be replaced by a set of Infrastructure Guidelines. It is critical that these Infrastructure Guidelines incorporate a realistic assessment of the likely impact on greenhouse gas emissions of Government investment decisions.

The National Development Plan review committed my Department to reviewing certain elements of the Public Spending Code to ensure climate considerations are adequately incorporated. As part of this programme of works, my officials have been working with the OECD, funded by the EU Commission's Technical Support Instrument, on two aspects of public capital expenditure appraisal requirements in Ireland.

1. The model for assessing the emissions impact of infrastructure investment; and

2. The appraisal of investments that may be vulnerable to the impacts of climate change.

This work will help to improve the Government’s understanding of the relationship and impacts of investment decisions on the wider environment and climate.

There has been extensive engagement with other Departments and stakeholders including an OECD fact finding mission in April 2022 and a workshop and diffusion event in January 2023.

The OECD are currently finalising their report on Strengthening Environmental Considerations in Public Investment Management in Ireland, which has been issued to a group of peer review countries. On completion of the report, my Department will evaluate the OECD’s recommendations before considering what changes may be appropriate for the new Infrastructure Guidelines.

Over the longer term, as set out in chapter 3 of the National Development Plan 2021-2030 Report, the Department will examine the role that the Infrastructure Guidelines can play in the achievement of broader environmental objectives and the role of the code in support the national commitment to achieving net zero greenhouse emissions by 2050.

Darren O'Rourke (Meath East, Sinn Fein)
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66. To ask the Minister for Public Expenditure and Reform the progress to date on the examination of the role the Public Spending Code can play in the achievement of broader environmental objectives, for example, valuing biodiversity or ecosystem services as contained in the 2023 Climate Action Plan; and if he will make a statement on the matter. [22189/23]

Paschal Donohoe (Dublin Central, Fine Gael)
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The National Development Plan (NDP) Review 2021 committed my Department to reviewing certain elements of the Public Spending Code to ensure climate considerations are adequately incorporated within the code. This commitment was reiterated in the Climate Action Plan 2023.

As part of this programme of works, my Department is currently in the process of revising the shadow price of carbon in light of our enhanced climate ambition. At the request of my officials, the Marine and Renewable Energy Institute in UCC have carried analysis to inform this work. My Department is reaching the final stages of this work. The update will ensure emissions are appropriately priced in economic appraisals and that the values in the Public Spending Code align with Ireland's climate targets.

My officials have also been working with the OECD, funded by the EU Commission through DG REFORM’s Technical Support Instrument, on two aspects of public capital expenditure appraisal requirements in Ireland: i) The model for assessing the emissions impact of infrastructure investment; and ii) the appraisal of investments that may be vulnerable to the impacts of climate change. This work will help to improve the Government’s understanding of the relationship and impacts of investment decisions on climate outcomes.

As was explicitly noted in the NDP, the commitment to investigate whether the Code can play a positive role through the development of central guidance on valuing biodiversity or eco-system services is a longer term objective. It will be progressed over a number of years as the other, more immediate, steps in the programme of reform committed to in the NDP are completed. The NDP review also specifically noted that it would be informed by results from Government-supported work underway on natural capital accounting, such as the INCASE project and the Government’s Biodiversity Action Plan. This work is still underway.

Darren O'Rourke (Meath East, Sinn Fein)
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67. To ask the Minister for Public Expenditure and Reform the definition of Government spending that may be harmful to the climate and environmental outcomes as contained within the 2023 climate action plan; if such a definition yet exists; and if he will make a statement on the matter. [22190/23]

Darren O'Rourke (Meath East, Sinn Fein)
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68. To ask the Minister for Public Expenditure and Reform the Government spending that may be harmful to the climate and environmental outcomes as contained within the 2023 climate action plan and if any harmful government spending has been identified; and if he will make a statement on the matter. [22191/23]

Darren O'Rourke (Meath East, Sinn Fein)
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69. To ask the Minister for Public Expenditure and Reform the tracking of Government spending that may be harmful to the climate and environmental outcomes as contained within the 2023 climate action plan; if such a framework for tracking yet exists; and if he will make a statement on the matter. [22192/23]

Darren O'Rourke (Meath East, Sinn Fein)
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70. To ask the Minister for Public Expenditure and Reform given the tracking of Government spending that may be harmful to the climate and environmental outcomes as contained within the 2023 climate action plan, if any harmful Government spending has been tracked / reduced; and if he will make a statement on the matter. [22193/23]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 67, 68, 69 and 70 together.

As part of the Climate Action Plan, DPENDR committed to developing and applying definitions to identify and track government spending that may be having a negative impact on climate and environmental outcomes.

A staff paper entitled ‘Review of Fossil Fuel Subsidies and other Potentially Climate Harmful Supports’ published in February 2023 represents the first step in fulfilling this commitment.

Having examined the various definitions of fossil fuel subsidies that are in use internationally, and considered the most appropriate definition for use in an Irish context, this paper defined a subsidy as any government support that confers an advantage on consumers or producers in order to supplement their income or lower their costs. A subsidy is considered to be a Potentially Climate Harmful Support if it is likely to incentivise behaviour that increases greenhouse gas emissions, irrespective of its importance for other policy purposes.

This definition was applied to identify fossil fuel and other potentially climate harmful supports in Budget 2023 on a subhead by subhead basis. The paper includes an inventory of expenditure subheads that meet this definition but it does not explicitly measure the impact of supports on the price of greenhouse gas producing activities, quantities consumed or emissions levels.

The identification of a subhead as a potentially climate harmful support does not mean that a programme is flawed or should be halted. Rather, it means that careful consideration should be given to determining if there are potentially less distortionary means of achieving the outcomes the expenditure supports.

Based on the results of this analysis, €1.9 billion allocated in Budget 2023 was considered to be potentially climate harmful. However, in several instances not all of the expenditure included in a subhead was potentially climate harmful, but the full subhead was included on the basis that a material portion of the spending was potentially climate harmful. Additionally, it should be noted that infrastructure provision is not included in this iteration of the review, nor are wider environmental impacts beyond climate mitigation considered (e.g. biodiversity). However, the provision of infrastructure investment was subject to a climate and environmental assessment undertaken by DPER in 2021 as part of the National Development Plan (NDP) Review.

For full details please the published staff paper, which is available at www.gov.ie/pdf/?file=assets.gov.ie/246726/9111558d-d0b6-4623-8862-ec16111dd8ba.pdf