Topical Issue Debate

VAT Rates Exemptions

Deputy Ciarán Lynch

I thank the Ceann Comhairle for affording me an opportunity to raise this issue. I ask the Minister for Finance to consider the return of value added tax incurred by voluntary organisations and charitable groups in the purchase of defibrillators. The presence of the Minister of State at the Department of Health, Deputy Alex White, leads me to assume that this issue straddles the Departments of Finance and Health.

The case for making defibrillators widely available has been widely established, including by the Department of Health. According to the Irish Heart Foundation, sudden cardiac death or SCD kills more than 5,000 people in Ireland each year. While the majority of these deaths occur in middle age or later in life, it should be noted that 100 young people aged 35 years and under lose their lives to sudden cardiac death each year. In other words, every week at least one person under the age of 35 years dies without warning.

Studies of sudden cardiac death have shown that the time between sudden cardiac arrest and defibrillation is the most critical factor for survival. Medical research shows there is an 80% chance of survival if a defibrillator reaches the victim within two minutes. The same research also demonstrates that the survival rate reduces by approximately 10% for every minute that passes before defibrillation. Although the survival rate of out-of-hospital cardiac arrest is approximately 7% in Ireland, it should be noted that 123 people were saved as a direct result of the use of defibrillators in the 12 months prior to October 2012. These individuals are still alive as a direct result of having access to defibrillators immediately after experiencing a heart attack.

A study carried out by the Department of Health in 2004 recommended that appropriate devices should be widely available, especially in sporting venues such as gyms and clubs. This aspect is of particular concern to me and the reason I raise this issue. When a voluntary organisation such as a sports club decides to raise funds to purchase a defibrillator, it must pay VAT amounting to 23% of the cost. Not only do clubs not receive any Government support towards purchasing such equipment and training members to use it but they are required to pay an additional 23% VAT for the privilege of having this equipment on site. While I accept that VAT regulations do not allow the Government to waive the VAT requirement, it is perfectly feasible for the Government to refund VAT moneys collected from voluntary groups and sporting organisations in the performance of what is a civic duty.

In Cork city, it is standard practice for any club hosting a schoolboy soccer game to have a defibrillator on site. Efforts to adhere to such codes of practice should be rewarded with a refund of the VAT incurred in purchasing a defibrillator. If the Government were to adopt this approach, it could well be copied all over Europe. However, for the purposes of this debate, the initiative I am proposing would definitely save lives. I look forward to the Minister of State's response.

Minister of State at the Department of Health (Deputy Alex White)

I am pleased, on behalf of the Minister for Finance, to have the opportunity to speak on the question of the VAT treatment of defibrillators purchased by voluntary and charitable groups.

While I appreciate and am conscious of the health concerns that form the basis of the Deputy's argument, he may be aware that in matters relating to the VAT rating of goods and services, the Government is constrained by the requirements of European Union VAT law, with which Irish VAT law must comply. Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate, which is 23% in Ireland. Parts or accessories are also liable to VAT at the standard rate. There is no provision in VAT law that would make it possible to apply a reduced or zero rate to the supply of such products. Under the EU VAT directive, member states may retain the zero rate on goods and services which were in place on 1 January 1991 but cannot extend it to new goods and services. As such, a zero rate cannot be applied to defibrillators.

In addition, member states may only apply a reduced VAT rate to those goods and services which are listed under Annex III of the VAT directive. While Annex III includes the supply of medical equipment for the exclusive personal use of a disabled person, it does not include defibrillators for general use by voluntary and charitable groups. In this regard, a reduced rate cannot be applied to the supply of defibrillators.

Exemptions from VAT are also governed by the EU VAT directive, which does not make provision for an exemption from VAT on the supply of defibrillators. For this reason, the only rate of VAT that can apply to the supply of defibrillators is the standard VAT rate of 23%.

While the VAT rate on the supply of defibrillators cannot be removed, the Deputy is seeking that compensation for this VAT be made to charitable and voluntary groups in the form of a refund of VAT. Ireland operates a small number of VAT refunds where VAT is refunded in set circumstances, some of which apply to medical devices. The VAT (Refund of Tax) (No. 15) Order 1981 provides that individuals can obtain repayment of VAT expended on certain goods and appliances which assist persons with a disability to overcome that disability. There may be circumstances where a defibrillator purchased by or on behalf of an individual may qualify for a VAT refund. However, a defibrillator purchased for general use by a charity or voluntary body would not qualify for a refund under this order. In addition, since 1987 there is provision within the Irish VAT code for the refund of VAT incurred on the purchase of new medical instrument or appliance by a person who donates the medical equipment or appliance to a hospital. However, the refund order only applies to medical instruments or appliances costing more than €25,390 and would only apply where the donation was to a hospital and not to a voluntary and charitable body.

As I indicated, Irish VAT law is governed by European Union VAT law. The EU VAT directive does not specifically provide for the introduction of schemes for VAT refund. While providing a compensation method does not affect VAT being charged according to the directive, this is not clear cut as it is generally counter to the provision that VAT should be paid by the final consumer of goods and services. It is for this reason that Ireland has not introduced any new VAT refund orders since the 1980s. The existing refund orders are all historical, dating back to the 1970s and 1980s, and any changes to VAT refunds since then have been either by EU requirement or by making minor changes to existing refund orders.

While voluntary and charitable groups are not compensated for the VAT incurred on defibrillators, Exchequer funding is separately made available to such organisations. In addition, the Irish tax code also provides an exemption from various taxes for charities and certain sporting and voluntary bodies, including an exemption from VAT on supplies.

Deputy Ciarán Lynch

I will be brief. I thank the Minister of State for responding to this issue. He hit the nail on the head, in that there is an anomaly in the taxation system. An individual can get a tax rebate of 23% on the purchase of a defibrillator whereas a sporting organisation or club of volunteers cannot. This anomaly needs to be adjusted.

If there is a European VAT issue in general, there is no better time to examine this matter than as part of our European Presidency. I call on the Minister for Finance to address it. This anomaly does not just affect the Republic of Ireland. Rather, it is a problem across the world. I am sure that, if negotiations on this issue occurred at EU level, we would receive a positive response.

Defibrillators are a proven life-saving measure. Last year, 132 young lives were saved because clubs voluntarily adopted the good practice of providing these machines. Indeed, Members can be assured by the presence of one inside Leinster House as well as on other premises.

The Minister of State referred to the situation in the 1980s. We have moved on a great deal since then, particularly so in terms of this issue. Sudden death syndrome, which arises from heart attacks, is a recognised difficulty. A means of dealing with such emergencies at club, voluntary and sporting events has been identified, that is, having these machines to hand, just as is the case in this building.

Via the Minister of State, I ask that the Department of Health re-examine this issue and, in so doing, engage with the Department of Finance to explain the anomaly in the system and to ensure that the issue is addressed during our European Presidency.

Deputy Alex White

The Deputy makes a strong case. At the outset and in his rejoinder, he outlined the undoubted value of defibrillators. He made the case well and compellingly. There is no argument about the inherent value in and importance and necessity of the provision of defibrillators.

The Deputy referred to the VAT treatment of defibrillators as an anomaly. It is reasonable to describe it as such, but the situation is rooted in tax law. We are not an outlier in this regard in the European context. Unless a member state had a zero or reduced rate of VAT in place for defibrillators or similar products or services on 1 January 1991, the standard rate of VAT applies. This is a rule of general application. The standard rate applies to defibrillators in the UK, France, Germany, Portugal, Austria, Denmark and Hungary, just to name some.

This situation is embedded in VAT law, but I accept the Deputy's case in respect of defibrillators generally. If anything can reasonably be done in the context of existing taxation laws to address the issue, I am sure that the Minister for Finance would be willing to consider it.

EU-IMF Programme of Support Negotiations

Deputy Michael McGrath

I thank the Ceann Comhairle's office for selecting for discussion what we can all agree is an important issue. We welcome the news that emerged from Brussels overnight regarding the possible extension of the term of the maturity of the loans drawn down under the European Financial Stability Facility, EFSF, as well as today's news from ECOFIN to the effect that the same extension would be considered in respect of European Financial Stabilisation Mechanism, EFSM, funding under Ireland's bailout agreement.

While I look forward to the Minister of State setting out the Department of Finance's position, the news raises the question of why an extension has not been provided to date. In July 2011, the Heads of Government and Heads of State agreed in a communiqué to extend the maturity of EFSF money for Greece to up to 30 years and to apply the same maturity provision to Portugal and Ireland. Since then, I have asked the Minister for Finance by way of parliamentary questions in the Chamber about why the provision has not been extended to us.

In February 2012, the Minister, Deputy Noonan, confirmed that, following on from the July 2011 communiqué, the Council of Ministers approved in October 2011 a European Commission proposal to increase the maturity of individual tranches of lending to Ireland and Portugal from a minimum of 15 years to up to 30 years. Clearly, this proposal has existed for quite some time. The July 2011 communiqué was quite categoric that the extension would apply to Ireland, yet we are being told in January 2013 that the Eurogroup and ECOFIN have asked that the extension of maturities be examined. In some respects, we are not making progress. We have gone from the extension being a certainty to something that requires examination.

I hope the Minister of State will set out the benefits, as the Government sees them, of extending the maturity of the various loans drawn down under the EFSF and the EFSM. The people at home will want to know whether an extension will make a difference to the types of budget we will see in the coming years. For example, will it result in a significant reduction in the country's level of interest payments and will it make our overall debt position more sustainable?

It should be pointed out that Ireland has been drawing down some funding under both of these streams for a long time. For example, we have drawn money from the EFSM over a 30-year period and money from the EFSF for 25 and 29-year periods.

We are beginning to do it. I would welcome it if the Minister of State set out on behalf of the Department what he regarded as being the benefits to Ireland of the extension of the maturity. The potential benefits are significant. We all want Ireland to return to the international bond markets as quickly as possible.

I would also like the Minister of State to deal with the issue of the concessions extended to Greece in November that have not yet been extended to Ireland. For example, Greece negotiated a deferral of interest payments on EFSF loans for a period of up to ten years. Such a deferral would bring immediate cash benefits to Ireland were it extended to us.

Deputy Alex White

I thank the Deputy for raising this issue and for his words of welcome. I welcome his welcome, if I might put it that way, for these important developments.

The meeting of the Eurogroup - the eurozone finance Ministers - yesterday had a broad agenda covering a number of issues, all of which related to the health of the euro and were important to Ireland. However, for the purpose of this discussion, I will refer to the outcome of the discussions on the extension of maturities on EU loans for Ireland and Portugal as well as the discussions on the European Stability Mechanism, ESM, direct banking recapitalisation facility.

The Eurogroup has agreed to examine the extension of the maturities on Ireland and Portugal's loans from the EFSF, the euro area facility. Last night, the Minister for Finance noted that this "is a very welcome and positive development" and that it "recognises the efforts being made by well performing programme countries". The Minister for Finance also clarified:

The Eurogroup agreed to refer this issue to senior officials to examine the technical details and they will report back shortly. This has the potential to further enhance Ireland's debt sustainability and to facilitate our successful full return to the markets.

I also remind the House that the ECOFIN meeting of all EU 27 finance Ministers has agreed to a similar request in respect of loans from the European financial stabilisation mechanism, EFSM - the EU 27 mechanism. Deputy McGrath has acknowledged that. These are important and potentially significant decisions. An extension of the maturities will be beneficial for this country as it will increase the amount of our debt with longer maturity. It has the potential to further enhance Ireland's debt sustainability and to improve our prospects of making a full return to the markets at competitive interest rates. That will mean private sector investors should be more willing to lend to Ireland, which should reduce the cost of our borrowing.

I should emphasise that this decision is only made possible by our consistent, strong track record of delivering on our programme commitments. It also reflects our considerable efforts in building support behind the scenes with our EU partners. The examination of the proposal will now be conducted by the European Commission and senior European officials, including Irish and Portuguese officials, to assess what loans will be eligible and the revised maturity dates. The advice of the NTMA will be a key element in our approach to this examination. The examination by senior officials should start immediately so that they will be in a position to report as soon as possible. The decisions taken last night and today serve as yet another example of the progress the Government is making at European level in reducing the cost of the EU-IMF programme entered into by the previous Administration. Coupled with the agreement secured in 2011 to reduce the interest rate on our loans, an agreement that saved the Irish taxpayer €9 billion in interest costs, we are making real progress in reducing the burden of the programme and positioning Ireland to make a full and sustained return to the markets at competitive rates.

The amount of funding potentially covered by these decisions is €22.5 billion for the EFSM and €17.7 billion for the EFSF. In the case of the ESM direct banking recapitalisation proposal, the Ministers received a report on the progress being made in the technical discussions. While further work remains to be done in this area, the Minister for Finance has stated that he is happy with progress to date. Our discussions on reducing the cost support to the banks, including the ESM direct recapitalisation, will continue and will deliver tangible results also.

Deputy Michael McGrath

I thank the Minister of State for his response. I urge the Government to use the EU Presidency to ensure this happens and that we will not have a repeat of this being stated, as happened 18 months ago, but never being delivered. Since the time it was agreed that we could draw down money over a 30-year period we have drawn down money for as short a period as three years. It is clear that implementation is key. I call on the Government to ensure this happens as quickly as possible, and also to ensure we follow through on the thrust of the June summit in 2012 , which was that the vicious circle between the banks and the sovereigns would be ended. I want to see that done for the promissory note and the potential use of the ESM to relieve some of the burden of the investment in the banks by the State. I urge the Government to ensure we examine the arrangement in its totality and that there is an overall package that makes our debt position more sustainable which will help the country ultimately to exit the programme, get back on the markets and help to develop a more prosperous economy.

Deputy Alex White

I again thank the Deputy and assure him and the House that these issues have been a constant preoccupation of the Government and of the Minister for Finance, in particular, throughout the Government’s tenure in office. That continues to be the case and every opportunity has been and will continue to be taken to advance the country’s position, as is desired by all of us, to ensure resolution of all of those questions.

It is important to clarify that the decision on the extension of our maturities, which the Deputy has raised, is separate from the continuing discussions on the broader question of our banking debt, to which he also referred. On that point, I reassure the House that we will continue to pursue the banking cost issues vigorously. The discussions are continuing and we will deliver a positive outcome on it also.

The question of seeking a number of the other measures provided to Greece was also raised by Deputy McGrath in his initial contribution. The House will discuss measures to assist Greece later this evening. It is on the Order Paper for the discussion to take place soon. However, it is sufficient to say that this country’s situation is very different from that of Greece. Nevertheless, it remains the case that we will continue to examine carefully any measures provided to other programme countries for any potential benefit they might have for this country. The agreement on extended maturities by the Eurogroup and ECOFIN is one result of this consideration.

Insurance Coverage

Deputy Jim Daly

I thank the Ceann Comhairle's office for the opportunity to raise this important issue in the House this evening with the Minister. The issue does not affect most people. It does not have implications for them because, happily, they are not in flood-prone areas and they have no problem getting flood insurance cover. The Irish Insurance Federation recently informed a committee of the House that 98% of home owners are in the lucky position of being able to get flood cover. Only a minute percentage – approximately 2% - of people cannot get flood cover.

For those 2% of people who cannot get flood cover, the floods in June 2012 resulted in 1,260 claims totalling €54 million. A large number of claims were from County Cork, much of them in west Cork in the towns I represent such as Skibbereen, Clonakilty and Bandon, which all have a long and increasing struggle with floods. The towns have a history of flooding and devastation. A total of 627 households claimed a total of €15 million during a flood in 2012, which averages out at approximately €24,000 per household. Such an amount highlights the amount of damage an average house can endure during a flood event.

It is a huge trauma for an individual to have their home destroyed by water, but they have the double whammy of having to clean up their home, get the dirty, filthy brown water out of the house, have their privacy invaded, return to their home with massively increased premiums and then be denied future flood cover. People in the town of Clonakilty that I represent are literally living on their nerves since June 2012 due to the habitual flood warnings that occur. There is a flood warning every month and at this time of year it is every week. People put out sand bags but they do not have insurance. They dread the prospect of being revisited by the horror of their home being flooded.

I reiterate my call for a solidarity levy on home insurance policies. The people of this country would countenance such an idea. I expect the 98% of people who are fortunate to have home insurance would accept a levy of 1% or 2% per annum, which would amount to €8 or €10, to cover the 2% of people who are denied flood insurance by insurance companies. We have precedents in the area. In 1955 the Government led an initiative to work with insurance companies to introduce a private motor insurance scheme which offered cover for anybody who was the victim of a car accident where the parties involved were not covered by insurance. I have examined the many examples that exist, for example in the United States, where FEMA, the national flood insurance programme, operates in various states. In effect, it is a solidarity levy, which is accepted by people. In this country we recently accepted a 2% levy on health insurance policies in order to salvage the Quinn group.

I urge the Government to give serious consideration to working with the insurance companies. I am aware of the steps that have been taken to date, especially by the Minister of State, Deputy Brian Hayes, and the Office of Public Works, OPW, working with insurance companies. However, I would like to see the matter being taken a step further and for the Government to liaise with the industry to ensure an insurance scheme is introduced.

Deputy Alex White

I thank the Deputy for raising this important issue. It should be noted that flood cover and its unavailability has been raised in this House on a number of occasions, not least by Deputy Daly and others. It is a subject with which I am most familiar. I am also conscious of the difficulties that the absence of such cover can cause to householders and businesses. The Deputy outlined them in his contribution.

The Deputy will be aware that the substantive issue of the provision of new flood cover or the renewal of existing flood cover is a commercial matter for insurance companies, which must be based on a proper assessment of the risks the insurers are accepting. These are often considered on a case by case basis and neither the Government nor the Central Bank has any influence over this matter. The Irish Insurance Federation, IIF, has advised the Minister that flood insurance cover is available to approximately 98% of householders in Ireland. It has indicated that when making underwriting decisions, insurers look at the claims history of the property and any flood protection measures implemented by the Office of Public Works, OPW, or local authority. As a result, some people will pay a higher premium because the flood risk is higher, or will have a higher flood excess on their policy. While insurers try to provide flood cover wherever possible, flood insurance is sometimes not economically viable, and in the interests of keeping premiums affordable for policyholders in general, the IIF says that insurers decline flood cover for new business for some risks or in certain cases have to withdraw flood cover at renewal.

The Office of Public Works is committed to doing all it can to alleviate the impact of flooding through the provision of defences and by taking steps to manage and reduce flood risk in the future through a strategic and sustainable approach under the national catchment flood risk assessment and management, CFRAM, programme. This commitment is underpinned by a very significant capital works investment programme which, along with expenditure on maintenance of arterial drainage schemes, will see up to €250 million being spent on flood relief measures over the next five years. The Deputy, in fairness, has also referred to the fact that various measures are being taken under the direction of the Minister of State, Deputy Brian Hayes, and his officials in the OPW, and there have been a number of meetings with the IIF about this matter and the various initiatives that are being taken.

The issue of a State indemnification scheme for those unable to obtain flood cover has been raised on a number of occasions. While it is difficult to quantify what the costs would be in a particular year, it is possible to say that the costs would be significant over a period of time on the basis of the eight major floods over the 12 year period, 2000 to 2012, costing the insurance industry approximately €700 million in flood claims. These costs are in addition to the normal infrastructure costs which arise from flooding such as repair of roads, bridges and so forth. Furthermore, if a scheme of this type was established, there is a danger that the industry would have a strong incentive to discontinue the provision of flood cover in medium and high risk areas, thus increasing the potential cost of the scheme over time. Therefore, such an arrangement has the potential to undermine the nature of the existing private insurance regime, making it difficult to withdraw it, even if was introduced on a short-term basis.

The approach being adopted by the Government to ensure the availability of flood insurance consists of continuing to prioritise spending on flood relief measures by the OPW and relevant local authorities, improving channels of communication between the OPW and the insurance industry on the effectiveness of these measures, and implementation of a comprehensive and strategic approach to flood risk management through the national CFRAM programme.

With regard to Deputy Daly's suggestion of the introduction of a regime similar to the Motor Insurers Bureau of Ireland, MIBI, system in respect of motor insurance, the problem with that proposal centres on who would fund such a scheme. Unlike motor insurance, flood cover is not a compulsory insurance system in this State, so there would be no basis for compelling the industry to contribute to an equivalent scheme for flood cover, as is done in respect of motor insurance. In these circumstances, the State would have to fund such an arrangement and it would, in effect, create a State indemnification scheme with major costs for the Exchequer.

Deputy Jim Daly

A cursory glance over the records of this House shows that this issue has been raised on an increasing number of occasions, and it has been raised many times in the past 12 months. Regrettably, the responses have not changed a great deal since early last year. That is a poor consolation and comfort to the people I represent in west Cork where there is a high concentration of people who cannot get insurance in towns such as Skibbereen, Bandon and Clonakilty and villages such as Rathbarry, Ballinascarty and Manch. These places experienced flooding over recent years.

The Minister referred to a cost of €70 million per year. I am referring to a solidarity levy shared by the approximately 2 million homes which were enumerated in the 2011 census. That would mean, at the most, between €30 and €35 per annum being contributed by each household as a solidarity tax. I do not believe it would require anything approaching the figure of €700 million to €800 million that has been paid out over the last ten years. When divided by ten, that figure is approximately €70 million per year. The figure I have in mind is €20 per household, and I believe people would contribute it. That would create a sufficiently strong fund. However, leadership is required. I call on the Government to get together with the industry. This has been done in the United States and there is no reason that it cannot work here. We just need the will to achieve it.

The representatives of the 98% of people who have flood insurance are fortunate enough not to be as anxious about this issue as those of us who represent the other 2%. The 2% is a tiny minority, but they are people. They live in houses that cannot be sold, they cannot move to other areas, they cannot upgrade or downgrade and they cannot get a mortgage because the banks will not give them one. These are real issues for real people about their homes. I plead with the Government to take leadership on this issue and make progress on it.

Deputy Alex White

I do not believe I can add further to the reply I gave earlier. I acknowledge the strength of the arguments Deputy Daly has made and the undoubted frustration, and worse, experienced by his constituents when faced with these eventualities. Indeed, I am familiar with similar experience in other parts of the country, including in my constituency. Other Deputies will have experience of this also. It is real problem for people. The insurance system in place is essentially commercially based. People's properties are covered on the basis of an assessment of risk carried out on commercial principles.

Anybody would have sympathy with the point made by the Deputy in respect of people who cannot obtain cover. As to whether there would be a basis for going outside those commercial parameters through the State stepping in by way of a solidarity levy or otherwise, it is an interesting and compelling proposal. There has been much debate in the Houses about the property tax. I am not trying to say the two are the same but the question of solidarity, whether it is intergenerational solidarity in the area of health care or solidarity between people who live in different parts of the country and have different risks associated with their properties depending on the climate or where they live, is a good point and an interesting political question we might consider. On the issue of the insurance regime, however, I regret the answer is not very different from the answer given previously. Insurance cover for property is done in the commercial environment and I cannot really add more than what I have already said about the State's role in that regard.

Climate Change Policy

Deputy Robert Dowds

Deputy Daly's Topical Issue matter fits in quite well with mine. He talked about a local issue, the appalling flooding that many of his constituents have had to face, which is an aspect of climate change. That is the issue I am raising in terms of the need for Ireland to lead European efforts to halt the melting of the Arctic ice cap as part of our Presidency of the European Council.

Many people smiled on hearing about the Topical Issue matter I intended to raise and thought it quite amusing. However, the single issue that trumps all our economic problems in importance is climate change. We ignore this issue at our peril. The melting of the Arctic ice cap is a glaring example of this.

According to Steve Connor, science editor of the London Independent, writing on 28 August last year, the area of the Arctic Ocean covered by sea ice fell to 4.1 million sq. km. in the summer of 2012, which was a record low and 70,000 sq. km. below the previous record set in September 2007. These figures were compiled by the US National Snow and Ice Data Centre in Boulder, Colorado. On 16 September last, the Arctic Ocean ice pack collapsed to its lowest level in thousands of years.

Why does this matter and why should we care? First, if the melting of Arctic ice continues, the enormous amount of methane gas locked under the Arctic Ocean and in sub-Arctic regions such as Siberia will be released and, as methane gas is 25 times more potent as a greenhouse gas than CO2, we will be in danger of runaway, catastrophic, irreversible climate change. Second, the Arctic ice cap acts as a mirror, reflecting some of the sun's rays back into space, and if the Arctic cap is gone, then there will be no reflection and that will add to the heating up of our world. Third, an obvious knock-on effect is if the Greenland ice sheet were to melt, then sea levels could rise substantially and this would put our coastal communities, such as those referred to by Deputy Jim Daly, at even greater risk. Fourth, in Ireland last year, we experienced significant flooding events and the signs are that happens because when temperatures are higher, more moisture gets into the atmosphere, which will lead to greater rainfall in our case and more flooding.

As we currently hold the EU Presidency, we could set a good example by reaffirming our national goals for dealing with climate change. We need to take action to further reduce our emissions of harmful greenhouse gases as quickly as possible through investing in renewable clean and green technology industries such as wind, wave and solar energy production. The same applies at EU level. If we do it right, we can become world leaders in terms of renewable resource technology and can become a shining example to the rest of Europe and the world that despite the economic storm which we have endured, we took the right decisions. A report commissioned by the German Ministry of the Environment in 2011 suggested that the EU should try to reduce CO2 emissions to 30% below the 1990 levels, and suggested that an additional 6 million jobs could be rolled out in Europe to deliver on this. I urge the Minister of State and her senior Minister to promote this agenda to the maximum extent while we hold the EU Presidency.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O'Sullivan)

I thank the Deputy for raising this important issue, which I am taking on behalf of the Minister for the Environment, Community and Local Government. As the Deputy said, this debate highlights the key role that Ireland can play during its Presidency in advancing action at EU level to address the global challenge of climate change. The melting of polar ice caps is only one of a large number of impacts arising from climate change but it can have far-reaching consequences in the context of rising sea levels and shifting weather patterns. We all need to take action urgently if we are to get back on a pathway to meet the internationally agreed goal of keeping the global temperature increase below 2° Celsius.

The findings in the United Nations environment programme's latest emissions gap report are stark. Greenhouse gas emissions levels are approximately 14% above where they need to be in 2020. Instead of declining, greenhouse gases are increasing more rapidly than in previous projections. Even if the most ambitious level of pledges and commitments now on the table were implemented by all countries, we would still fall well short of where we need to be by 2020.

Ireland is determined to drive the climate agenda forward during our Presidency by progressing a number of key initiatives at EU level, including the finalisation of new legislation in relation to reducing CO2 emissions from cars and vans, and holding political discussions and reaching conclusions on a new EU climate adaptation strategy. The EU cannot address this issue alone, however, as it emits only approximately 11% of global greenhouse gas emissions and it needs to encourage and lead other parties both in the developed world and among developing nations to take early and effective action.

This shows clearly the importance of the negotiations taking place under the UN Framework Convention on Climate Change, UNFCCC. The latest round of those negotiations, held in Doha last November and December, was difficult but, ultimately, successful. The Doha outcome advances work towards the 2015 global agreement that will tie all 195 parties to the UNFCCC, both developed and developing countries, to a single legally binding agreement to reduce greenhouse gas emissions. In addition, a number of parties joined the EU in a second commitment period under the Kyoto Protocol, which is welcome. However, all of the second commitment period parties together account for only approximately 15% of global greenhouse gas emissions and, therefore, it is critical we turn our focus to making progress on delivering the new agreement and on increasing our mitigation ambition in the pre-2020 period to keep the 2° Celsius goal within reach.

Doha was about building on the 2011 Durban agreement. We acknowledge substantial work is required during 2013 and 2014, and in our role as EU President, Ireland will have a pivotal role in advancing these negotiations and resolving outstanding issues over the next six months. It is our intention, therefore, to build on firm decisions and timeframes agreed in Doha by facilitating further work and engagement on key elements which will be discussed at the inter-sessional meetings of the UNFCCC in Bonn in April and June. It is also envisaged that Ministers will discuss a number of important climate issues at the informal Council of Environment Ministers to be held in Dublin in April. In preparation for our leadership role, the Minister for the Environment, Community and Local Government held discussions with most of his counterpart environment and climate Ministers across the EU and also held extensive bilateral meetings with key countries during the Doha COP. We will build on these engagements during our EU Presidency to progress the international climate agenda. I again thank the Deputy for raising this important issue. Ireland intends to use its Presidency to lead in this area.

Deputy Robert Dowds

I thank the Minister of State for her reply. The problem for every person on the planet is we find it difficult to accept the disaster with which we are faced and while, intellectually, we can understand it, emotionally we probably have not taken it on board. This is a huge problem for all of us because it is difficult to get ourselves into the mode where we truly appreciate where we are. What we can do within the EU is only part of what needs to be done in the world. Can we demand of fellow member states particular outcomes in terms of climate change practice? There are increasing problems with CO2 emissions. Can we punish the countries with which we trade that do not take on board the need to change how we do things?

Deputy Jan O'Sullivan

We have to do everything we can. The Doha outcome streamlined the negotiating process, which is important. The Deputy asked about the possibility of raising this issue with our trading partners. There are opportunities for Ministers at various meetings abroad to raise such issues.

Much of this is about building political momentum. We have the means. The EU has significant goals in place and there are binding obligations on all member states. The Deputy will be aware work is ongoing on a climate change Bill, which is almost at the point where the heads of the Bill are ready for publication and discussion by the relevant committee. Sectoral adaptation plans will be prepared in a number of Departments in the context of the legislation that is being worked on. Within Ireland, we are working on our obligations and we are also working on engaging with our European partners. We also need to use our influence in the wider world because Europe only represents a small percentage of global greenhouse gas emissions. We have to work at local, European and international level but it is important that the Deputy raised the issue because it tends to come and go on the political agenda. It tends to get prominence from time to time and it is important to raise climate change on a regular basis.

President Obama referred to climate change in his speech yesterday at the inauguration of his second term as President of the United States. The United States is also a very large player. It is important that Deputy Dowds has raised the issue today.

Dáil Éireann debate - Tuesday, 22 Jan 2013