I am very happy to make this opening statement. I apologise that I was away from the Dáil yesterday, but I am very glad to be back.
We have a major challenge in front of us, but it is one that I think that we as a country will be good at. Tackling climate change is something we can be good at and I am convinced that it will be good for us as a people. One would not think that at the moment because in truth we have not been successful in recent decades in addressing the scale of the crisis with the speed of response by any measure. The assessment of the Climate Change Advisory Council, which the Supreme Court referred to in its assessment of our mitigation plans to date, is that we are off course and heading in the wrong direction rapidly. That is the most honest assessment anyone could give. We are talking about turning around full circle and heading in a direction that will see us turning from being laggards to leaders as a country.
I am convinced that we can and will do that.
I intend today to set out the various factors that give me some confidence in our ability to meet the challenge we face and to reflect on how we might start doing it. The first cause for optimism is the fact that the key to success in this endeavour is the conviction that we can do it. That includes political conviction but also personal conviction among the people of this country. In the past two years, perhaps in response to our previous failing, there have been developments on the political side that give me cause for hope. The approach we have taken in the Oireachtas in the past two or three years has had an effect. The establishment of the Citizens' Assembly on climate change was a seminal first step in the direction of answering the question of how we become leaders rather than laggards in addressing the climate challenge. That was the key and correct question which we put to the assembly. Ms Justice Laffoy, Ms Sharon Finegan and the team of people who were involved in that work are now engaged within the Department of the Taoiseach in co-ordinating some of our climate change response. They did a really good job at the Citizens' Assembly asking the right questions, presenting the right evidence and listening to the citizens who participated. Those citizens came back, in their series of recommendations, with a clear conviction that we can and will be good at meeting this challenge and that we want to do something about it.
It was appropriate that the Oireachtas, in response to the report of the Citizens' Assembly, established the Oireachtas Joint Committee on Climate Action, which included representation from right across the last Dáil and Seanad. The committee did very significant work in listening to the evidence, considering the various options and answering the question of how we become leaders rather than laggards. The report it produced contained a consensus on most matters. There was not agreement across the board on the issue of carbon taxation but on most of the key measures, mechanisms and targets, there was political agreement. That consensus was an important change and condition which gives me some hope of our success in the challenges we face.
I commend my predecessor as Minister, Deputy Bruton, on the work he did in the role. The approach he took was appropriate in a variety of ways. I refer in particular to the lessons he took from the Action Plan for Jobs, for which he was responsible earlier in the last decade and which had real success in delivering a systemic approach within the Government to addressing a specific issue. His applying some of those lessons to the climate issue was appropriate and correct. The climate action plan he delivered was welcomed by most environmental organisations of which I am aware and by this House. This Government, under the programme for Government we have agreed, has decided that as welcome and well structured as Deputy Bruton's plan was, it was not ambitious enough. That is correct and true. We said at the time that the early-stage reductions, in particular, were not commensurate with the scale of the challenge that climate change presents, including the requirement to meet the goals set out in the Paris Agreement.
This Government is setting out, on the back of the good work that was done in establishing that climate action plan, the work the Oireachtas committee did in the last Dáil and the work of the Citizens' Assembly, to take the progress that was delivered by those methods and to aim higher. Specifically, we are aiming for at least a 7% reduction per annum in emissions over the next decade and to be net zero and carbon neutral by 2050. That ambition is in tune with what the EU is now proposing and with what the Commission President, Ms von der Leyen, said yesterday in her state of the Union address. I hope it is achievable, even though the timeframe is very tight and nothing is certain. It may give us a possibility of meeting the Paris Agreement climate objectives of preventing average global temperature increases from going beyond the 1.5° C level that gives us some statistical chance at this stage - a possibility, not even a probability - of avoiding runaway, systemic climate change.
I refer to the EU and President von der Leyen because what is happening in that arena is another factor that gives me a certain hope as we face the challenge of climate change. I was involved back in 2007 to 2009 in the drafting of the climate directive and the renewable energy directive, along with my then colleague and former Minister, John Gormley. I believe that the only way we can manage this challenge is as part of an EU system. Europe took its eye off the ball on climate when the financial crisis hit and ignored the issue for the guts of the last decade. It was probably concerned about the competitive advantages the United States may have had because of cheap gas. In any event, it was fixated on the financial crash and the migrant crisis and, as a consequence, it took its eye off the ball on climate. I believe that has changed in the past two or three years. The most important European legislation in this area is not that relating to the targets or the raising of ambitions in that regard. In truth, the target of a reduction of emissions of 40% and a 33% increase in renewables in the next decade was not ambitious enough. Critical to the response and the change we have seen has been the introduction of new governance directives and rules to help meet the climate change challenge.
I believe this new governance initiative is appropriate for a variety of reasons. First and most important, it gives flexibility and responsibility back to the member state. It is not a case of one size fits all. It is not a diktat from Brussels as to exactly how things must be done. It is an agreed mechanism whereby each country, in sharing the overall objective, had to come up with a national energy and climate action plan which showed how it could best meet the overall target within its own circumstances. I mention those plans because they are the binding mechanism that will legally demand action of us for fear that in the absence of meeting the requirements, we would have to pay further fines, in addition to the fines we already face for not having met our 2020 targets.
The Government, on coming together, agreed a more ambitious programme with more ambitious targets than what had gone before. In effect, we are doubling our climate ambition, which will be a huge challenge. We agreed to submit the existing climate action plan to the EU as part of its national emissions ceiling, NEC, process in July this year. In so doing, we enabled the Commission to sign off on its assessment of all 27 national energy and climate action plans. Next month, the Commission will present an overall analysis of the plans that have been presented and what effort-sharing arrangements might be needed to enable member states to reach the higher target of a reduction of at least 55%, as set out yesterday by President von der Leyen. My understanding from the German Presidency is that it is a key priority to get agreement on those targets by the end of the year and to get agreement on the effort-sharing process. The key timing consideration in this is for the EU to be able go into the United Nations Framework Convention on Climate Change, UNFCCC, process, to go to Glasgow for the 26th meeting of the Conference of the Parties next summer and to be able to present a level of ambition that will, it is hoped, encourage other countries in their climate action efforts. These countries include China and the United States - Lord knows what we can expect of the latter at the moment - but also, critically, the group of developing and other countries with which Europe has allied in recent UN climate negotiations because we have a common interest.
The approach I am hoping to take is that we fit in within that EU process. Our strength is as a member of the EU contributing to a global response and hoping that Europe can use its leverage - it is not insignificant as a bloc of real scale - to negotiate with other countries to live up to the requirements of the Paris Agreement. In that context, I hope to introduce new climate legislation in the House early in October, as committed to in the programme for Government and in accordance with the proposed approach of the previous Minister, Deputy Bruton, on which I want to follow through. The legislation will strengthen the powers of the Climate Change Advisory Council, as recommended in the report of the joint Oireachtas committee. The council's first task will be to establish a national climate action objective which reflects our higher ambitions, including a net-zero carbon footprint rather than the 80% reduction set out in the earlier plans and a mechanism of three five-year plans which detail how we set ourselves on that course over the coming five-year, ten-year and 15-year periods.
It would also set out, to the greatest degree of specificity possible, what sort of approach we are going to take towards meeting the long-term target. In doing that we will answer appropriately the valid criticisms contained in Mr. Justice Frank Clarke's judgement in the Supreme Court case taken by Friends of the Irish Environment about the previous national mitigation plan. More important, however, we will establish the mechanisms internally with which our public service and State system will be able to help our people make the leap we are going to have to make.
There is an opportunity in this rather than a problem because there is an opportunity for a change which can deliver a better economic model than the one we currently have. At the centre of the change we are about to make there must be a just transition. There must be the development of a new economic model which is socially progressive as well as environmentally progressive. It must also give us a secure economy, which was the consistent refrain in the discussions of the previous Joint Committee on Communications, Climate Action and the Environment on whatever measures we were looking at. It is absolutely critical that we do that.
We will do this first and foremost by concentrating on energy efficiency. It is perhaps the least glamorous aspect of this and gets the least attention but it is actually the most important. We will do that by setting ourselves the goal of taking out all of the oil and gas-powered boilers in our homes over the coming two decades and replacing them with heat pumps and really high-quality insulation so we no longer have to burn fossil fuels to heat our homes. That is the guiding star in all of this. It is complicated because there are so many options and so many different areas of life it will affect, but the one simple message to our people is that we are going to stop burning fossil fuels. Within two decades we must finish using fossil fuels in the energy system as part of this path. That will bring huge benefits because a person living in a house that is properly insulated to B2 standard or higher will realise that there are huge comfort and health gains. Critically, it is the best way of tackling fuel poverty. The worst curse of fuel poverty is having to pay the fuel bill. If we can retrofit our houses so there does not have to be that spend on fossil fuels, that will provide a huge leap in social justice and improvement for all of the people in this country.
Part of the funding for that will be covered by the revenues we get by introducing a carbon tax. Some parties will try to dispute that as an approach but it is not the be-all and end-all. Indeed it is not even the key measure, but it is just one of the mechanisms by which we can support the funding of what is a €50 billion project. This is not small. This will create 30,000 jobs. It will, as I said, use largely Irish materials and Irish companies with real skills and expertise in the area, which will create huge gains. It will use funding from the carbon tax and, I hope, funding from the European Union as part of the Green New Deal that the President of the European Commission, Ms Ursula von der Leyen, set out yesterday. It will use funding from the climate fund, which we legislated for just before the summer recess, and it will use private financing. Critically, this work will be done on private homes and offices as well as public buildings and social housing. We need a whole range of different solutions. The carbon tax will provide one stream but it will be only one of many we will have to apply.
On the energy side, if we can, and we will - manage those efficiency measures, the opportunity on the generation side is immense. I was very proud last week that we agreed the successful launch of the first auction for renewable energy that sees us moving away from a REFIT support price for renewable electricity toward an auction system where the industry has to bid in to have the ability to sell into the market. I am glad to say that the bid price, if index-linking is included, was about 20% lower than the outgoing REFIT support price, and I expect that to continue to fall as the cost of wind and in particular solar power continues to fall. Again, critically, to deliver a new type of economy based on social progress and different types of ownership of capital and production, we are looking to expand further and build on the seven community energy projects which were successful in that auction scheme. I expect the next scheme to have a much larger number of similar community-based groups involved in tapping into new power supply systems.
On a much larger scale but still one on which we must still look at community and national ownership, we should be preparing ourselves in this Dáil, in this term and the following one, for the massive development of offshore renewable energy as one of the huge projects for progress in this country that is available to us. Our sea area is ten times our land area and it is one of the windiest areas in the world. We have real skills in project management, engineering and renewables. We were one of the first countries to go offshore with wind energy. Those six turbines in the Arklow Bank are now tiny compared with what other countries are doing. We were there at an early stage, but we did not keep going with it, and now is the time for us to catch up. The scale of the project is again immense. We are talking about tens of billions. It has to work in co-operation with our neighbours the UK as well as the rest of the Continent, whatever else happens on Brexit. This is an opportunity we will tap into.
Key to making it successful is progress on the marine planning and development management Bill which needs to go through this House in the next six months. That is the sort of timeline within which I hope we will be able to pass it. That will give an investment certainty, a planning certainty and a grid development certainty which will allow us to progress and to start to deliver at that scale. The programme for Government mentions 35 GW, and there is nothing to stop us going beyond that if we can build the right interconnection and transmission system to tap into that power supply. That sounds like it is at a scale beyond compare with anything done to date, and it is, but that is what we intend to do. That is the sort of project that will allow us to meet these targets and see a huge economic benefit for this country.
We also need to develop our grid onshore. There have been key developments on this in recent weeks. While I know it is contentious and there are different views, the Northern Irish planning approval for the North-South interconnector brings real urgency to the development of that project. Last week Deputy McDonald rightly raised concerns about the cost of energy to consumers. That project is critical to helping bring down the cost of energy and for having an all-island energy system. There is such uncertainty with Brexit at the moment but whatever happens it is vital we maintain an all-island approach to meeting the climate challenge, because if we try to do it as two separate jurisdictions and systems, it will not work and we will not be able to meet our targets. We will not be able to get all of the benefit which accrues from an all-island approach if we start separating out and do not have a connected grid.
That connected grid has to bring us right down to the street level. In the new system, as we take out fossil fuels we start putting in heat pumps and electric vehicles, managing that grid at the distribution level is probably the most important single project in this whole system. If we get that right, retrofitting houses and the electrification of the transport system will work. It is a huge challenge which the ESB is well up for and well capable of meeting. We will learn, and indeed we already are, how we do that in a way that allows us to apply some of the lessons to the rest of the world. It is not all bad in our country. We tend rightly to be negative about failing to meet targets, but in truth we have learnt a lot about how to integrate renewable power. We are probably ahead of every other country in that because of the learning by doing which we have had to do. The ESB can and will apply that now as we move to the next phase of the revolution, namely, bringing it back down to the street and house level.
On transport, and I will only touch on some of the big transport projects we are going to have to undertake, it will require political commitment to move away from the sprawled planning model we have allowed to develop in our country over the past 50 years. It has been a car-based system. It has already been agreed in the national planning framework, which I think most parties have agreed to, that we need to bring life back to the centre of our rural communities, our villages, our towns and our cities. We need to make it safe for our children to walk and cycle to school.
We need to build up local high streets so local retailers and enterprises can have a vibrant future as well as a low-carbon future. It will be the development of a system that is dominated by safe active travel and public transport. Of course there will be use of cars but it will be done in a way that does not see the cars dominant and gives people freedom of choice, options, and the high-quality local environment we see throughout the country, which is the person-centred development of on-street planning. The villages, towns and communities that are really successful are the ones that are starting to get this planning right and creating local environments that are low on air pollution and high on vibrant street life. This is where we need to go. It is a win-win in tackling climate change when it comes to changing transport policy.
We do need to change. We have to spend 10% of our budget promoting walking and cycling if we are going to make it work. I would like to hear from others if they disagree with what is in the programme for Government. We need to switch our transport spending so the remainder of the capital budget is 2:1 in favour of public transport over roads. The benefit will be that we can start to design our new housing and address the housing crisis by putting housing closer to public transport so people have a high quality of life and save time if they have to commute. We have to learn the lessons from Covid and take some of the changes that have come with Covid by moving away from the model of commuting every day of the week and opening up to the possibility that, even after Covid is gone, people will not necessarily be commuting four or five days a week.
I am only scratching the surface of what the possibilities are and what we need to do. The Dáil will have to agree in the next year or two at the latest, as part of drafting the new national energy and climate action plan, which is our contribution to meeting the Paris climate agreement, a land use plan that sets out how we critically bring together addressing the biodiversity crisis and the climate crisis. The two go together. First and foremost, a land use plan has to start with a plan for rural Ireland and the development of communities. We cannot separate us from nature. We are all connected. We are part of the environment and we have to think of land use planning in this way.
As we develop vibrant rural communities, we will do so best by also looking at how we store carbon and how we pay our farming communities for the expertise and skill that will be needed in the storing of carbon, particularly in peat soils. As part of our just transition we will invest significantly in using the skills of Bord na Móna to manage bogs and peatlands as a critical element of meeting our 2030 and 2050 targets. Similarly, we will pay farmers for meeting the second key objective, which is the restoration of biodiversity. We will look at changing the forestry model completely and make the evolutionary step to the next form of forestry, which will be away from clear-felling, monoculture short rotation crops towards long-term close to nature continuous cover forestry. It will take time to develop this. It will take time even to get the saplings and, as we know, it takes time to do the planning. This is the change we need to make and the land use plan will set out what type of forestry will go where and what type of supports will be involved.
The land use plan will also need to set out how we manage and improve our water quality. The biggest failing environmentally has been the loss of pristine water and the ongoing scandal of pollution of our waterways by wastewater systems, nitrogen, excessive fertilisers and other factors that have led to the loss of our water quality. In tackling all of these issues together we will help to manage our floods in a much better way, preparing and adapting for the climate change we know will come.
The land use plan must also monitor and reduce the level of ammonia and nitrogen pollution. All of this can be done not by telling the farmer what to do or wagging fingers and talking down to someone. We are looking for their help. We are looking to pay them properly for making the change and to guarantee, as I believe there is agreement throughout the House, that we want to see the Irish family farm thrive in this climate changing world we have to address. It is doable. It just requires an ability to see and do things differently and to allocate funding, road space and decision making towards this task. It will be done best when we work collectively. I look forward to working with the climate committee when it comes to the introduction of the legislation and for it to have a critical role in the ongoing review and approval of the rolling budget approach we are looking to take.
This works best when there is political consensus and when there is not a division on the issue. We work well as a country when we set ourselves a common target. I hope that what I sense is true will be true, which is that all parties and Independent Deputies agree this is a project we should take on. It is not something that divides us. We may disagree on the policy details and the timing, and we may even disagree on the budget, but I hope we can agree on the overall objective that the country wants to be and will be good at this. In doing so we will meet the international obligations to deliver climate justice to the poorest countries in the world that will be hit hardest. In doing it we will also restore a new sense of connection between our own selves and our local environment and the nature around us. We live in a beautiful country. We are lucky to live in such a temperate and relatively stable environment. We need to keep it this way. If we can agree common purpose on understanding the scale of the promise and the vision on how we live in our own homes, local communities and a world we want to protect for younger people and ourselves, we can debate politically the details and we can even argue, but if we do not have as the first principle that we will do this, then nothing will happen.