The first matter on the agenda today is a discussion with the Minister for the Environment, Heritage and Local Government on the forthcoming meeting of the Environment Council. I welcome the Minister and his officials. Discussions with Ministers in advance of Environment Council meetings are now an integral part of the joint committee's annual work programme. The committee is appreciative of the time the Minister and his officials have taken to attend. It considers these briefings and discussions to be important elements of scrutiny introduced by the Government to enhance the role of the Oireachtas in the EU legislative process.
Environment Council: Ministerial Presentation.
I enjoy these sessions also as they are very helpful. They force me to get my head around the upcoming agenda more succinctly than I would otherwise do and are part and parcel of a healthy exchange of views. This is a very interesting day for us to meet as 11 October is the day on which Ireland would have had to pay penalties exceeding €20,000 per day. As the joint committee will know, notwithstanding the inaccurate information distributed by the Commission office in Dublin last week, the Court of Justice decided to strike out what one might call, for want of a better description, the "bogs case" against Ireland. The Commission indicated last month that it was very happy with the proposals we had introduced. It is a positive step forward.
I thank the committee for the invitation to meet it to discuss the agenda of the Environment Council on Monday next in Luxembourg. As the committee will see when we go through it, the agenda for the meeting is very light. Monday's meeting will be the first formal Environment Council of the UK Presidency. An informal meeting held in London last month was a joint meeting of Environment and Agriculture Ministers, an unusual line up which made for an interesting set of sessions. The theme of the joint meeting was agriculture and climate change and key topics for consideration were the significant challenges and opportunities climate change presented to European agriculture and the role of agriculture in reducing greenhouse emissions. Ministers heard a series of presentations from a range of experts which submissions will serve to inform our consideration of climate change and agriculture into the future. The meeting was very interesting from that point of view.
The three substantive matters on Monday's Council agenda are REACH, better regulation and climate change. The Council will hold a policy debate on REACH, the proposed new EU chemicals regime, which is a major initiative with significant environmental and economic relevance. While the initiative is being examined in the Environment Council, it is the Competitiveness Council which has taken the lead. Some weeks ago the Presidency presented a compromise proposal for REACH based on the original proposal and taking into account views expressed in earlier Council discussions. The Council will consider the compromise proposal next week. Discussions are ongoing in working groups and a number of committees at the Parliament and we expect a further revised proposal from the Presidency next month. The Council will focus on ensuring the proposal retains the potential to achieve the overall human health and environmental objectives while maintaining competitiveness.
The Council will consider draft conclusions in preparation for climate change negotiations at the UN meeting in December. I will lead a high level delegation from Ireland to the 11th conference of the parties to the United Nations Framework Convention on Climate Change. December's meeting will be significant in a number of ways. It will incorporate for the first time the parties to the Kyoto Protocol since ratification by Russia and the taking effect of the protocol and provide the occasion for the formal adoption of the 2001 Marrakech accords or methodologies for fulfilling parties' protocol commitments. While the name "Marrakech" sounds exotic, the accords are probably as mind-numbing a document as one would ever have the trouble to pass one's eyes over. They deal with very detailed implementation methodologies.
The Montreal meeting will also present the first formal opportunity for parties to discuss the future of the international process after the Kyoto Protocol's first commitment period expires in 2012. The European Union will be seeking to engage parties on the key issues of how to build on the Kyoto Protocol. This will be done with a view to achieving the ultimate objective of stabilising concentrations of atmospheric greenhouse gases at a safe level.
The committee will recall that at the Environment Council meetings in March and in the spring, the EU made considerable progress in defining its position on a medium and long-term strategy to counter climate change. In summary, it was agreed that to fulfil the EU objective of limiting global annual mean temperature increases to a maximum of 2 degrees Celsius above pre-industrial levels, atmospheric greenhouse gas concentration levels will need to be stabilised "well below 550 parts per million volume CO2 equivalent".
Second, to achieve these stabilisation levels, global emissions of greenhouse gases will need to peak within two decades followed by a substantial reduction of at least 15% and perhaps by as much as 50% by 2050 compared to 1990 levels. Finally, the EU is willing to consider emissions reduction targets for industrialised countries of 15-30% by 2020 and 60-80% by 2050. These are intended as a basis for international discussions on further action.
The European Union has a strong position on climate change and on what it wants from Montreal. It is seeking a broad, open and early discussion with all parties on the way forward. It hopes particularly to engage with the US, if possible, and the heavier greenhouse gas emitting developing countries such as China, India, Mexico, Brazil and South Africa. Negotiations at Montreal are unlikely to be easy. A number of parties continue to be resistant to and fearful of this process, and their concerns will have to be heard and considered. The debate is ongoing on this issue.
At the Council meeting next week it is intended that over lunch we will have a general exchange of views on the issue of better regulation. Our guest will be Mr. Karl-Heinz Florenz, the Chairman of the European Parliament's Environment Committee. This should lead nicely into the formal agenda item on better regulation. During the public debate we will consider how better regulation can contribute to better environmental policy and outcomes. In this context the REACH initiative is a good example of consolidation in Europe because it will replace up to 40 separate legal instruments. It is a good example of tidying up the legislation. In particular we will look at how better regulation can contribute to the development of environmental legislation so that it meets its objectives in ways that take full account of the economic, environmental and social impacts.
This is an area in which I have a strong personal interest. During the Irish Presidency we launched a joint initiative on better regulation involving Ireland and the following three Presidencies, Netherlands, Luxembourg and the UK. During the Netherlands Presidency it was extended to include Austria and Finland as forthcoming Presidencies. The aim of the initiative is to ensure a high profile and a measure of continuity for work in the very important area of better regulation. I am pleased, therefore, to see this on the table for discussion at the Environment Council. Addressing a conference in Kilmainham on better regulation during our Irish Presidency I spoke about the burden that excessive and inappropriate regulation imposes on business. I have spoken too about the related issue of impenetrable bureaucracy and the need to improve the level of communications between the EU and its citizens. The simplification and consolidation elements of the better regulation programme can provide some response to this.
The work being done at European level complements the work being done at national level in Ireland under the regulatory reform element of the public service modernisation programme. A high volume of legislation, in particular relating to the environment, originates in the EU for transposition and implementation in member states. This complementarity of approach is critical to success. It is a vital and important element in the implementation of the range of initiatives geared towards the achievement of our environmental objectives. Simplicity is preferable so as not to overburden business or the general public.
The immediate focus of better regulation in the environment context is on the Commission's seven proposed thematic strategies required under the 6th Community Environment Action Programme. These will be considered individually by Council in due course. The waste, natural resources and marine strategies are listed on the agenda for the December Council.
Finally we will have other business involving five items. First, the Commission will introduce to Council its communication on reducing the climate change impact of aviation. The Commission will also provide Council with information on the review of the EU Sustainable Development Strategy. Third, at the request of the Spanish and Portuguese delegations we will hear a report on the fifth meeting of the Ibero-American Forum of Environment Ministers. The fourth item is perspectives on the future use of genetically modified organisms. We do not yet have a paper on this from the Danes, who requested its inclusion, but I would expect one in the next few days. Regrettably, we are meeting in advance of seeing what the Danes have in mind, which is an odd way of doing business. Finally, the Netherlands has requested inclusion of the environmental aspects of the seventh research framework programme and the competitiveness and innovation programme. While the competitiveness council takes the lead on these programmes we clearly have an interest in the environmental dimensions.
The seventh research framework programme is the instrument through which Community research policy is funded and implemented. Ireland is broadly satisfied that many of the priorities put forward in our national position paper on the programme have been reflected in the Commission's formal proposals. As yet, there is a great deal of uncertainty about the size and scope of the programme as this is contingent on the outcome of political discussions, particularly on the EU budget for the same period, the financial perspectives for 2007 to 2013. We are a bit away from finality in this area.
Ireland, while broadly supportive of the objectives behind the competitiveness and innovation programme, has a number of concerns about how this programme will work including the dilution, both in terms of money and objectives, of the environmental programme. We are particularly concerned that the programme, if introduced, should attach sufficient importance to research and development for environmental technologies, which is now a core objective of the revised Lisbon Agenda. It was widely regarded as an area in which Europe could steal a march and we are anxious that the research programme should make specific provision in that area. We are actively pursuing these issues with our colleagues on the competitiveness side.
That is an outline of the Council agenda for 17 October. I thank the joint committee for the invitation to share this with them. I might add that the Commission's communication on climate change and aviation has just arrived. While there is a text, I do not have a copy to distribute to members.
I thank the Minister. I will take questions in order of party representation.
How is it proposed to achieve the EU objective of limiting the global annual mean temperature increase to a maximum of 2 degrees Celsius above pre-industrial levels, with atmospheric greenhouse gas concentration levels being stabilised well below 550 parts per million volume CO2 equivalent? The Minister's submission states the European Union hopes to engage with the United States, if possible, and the heavier greenhouse gas-emitting developing countries such as China, India, Mexico, Brazil and South Africa. How can it have any effect on the actions of the United States or other countries?
The Deputy has put his finger on an important aspect of this issue. This is the reality faced in the European Union. The Union forms a relatively small part, geographically, of the globe. A challenge that we continue to face is engagement with the United States, in particular. However, other greenhouse gas-emitting countries, particularly those in the developing world, must be engaged with also, with the ultimate goal of everybody sharing the burden.
At the back of the question asked by Deputy McCormack is an emerging concern that the European Union would find itself at a disadvantage if it took on its burden and other developed countries such as the United States did not carry their fair share. This issue is central to the negotiations. There must be lobbying and continuous diplomatic contact, particularly with the United States, with the view to ensuring that country takes its portion of the burden. The Deputy will be aware that the debate is ongoing, particularly in the United States, on the precise impact greenhouse gas emissions have or whether the planet is going through some cycle. There is a degree of unwillingness to accept what most of the rest of the world accepts, that global warming is a reality.
The European Union, through measures being discussed here and within the Union, is setting its own targets. The US global climate change initiative, published in 2002, seeks to limit rather than reduce greenhouse gas emissions. There is a fundamental point of difference. US strategy aims to cut emissions by 18% in the next decade but it is taking a different viewpoint than the European Union which may decide to deal with the issue through diplomacy, negotiation or continuous pressure on the United States.
We should not play a blame game with the United States on this issue. The European Union should look for a more constructive dialogue with it as, although two views are evident, the issue must be resolved. The only way it can be resolved is by combining actions between the United States, the European Union and the rest of the developed world.
That adequately answers my second question but my first was related to the EU objective of limiting the global annual mean temperature increase to a maximum of 2 degrees Celsius above pre-industrial levels.
That is the whole point of the EU climate change programme which outlines specific steps and targets. That is the issue now under discussion. I have mentioned the methodologies of the 2001 Marrakesh accords, for example. The Deputy's question relates to the whole point and purpose of the EU programme.
Is it correct to state an increase of 2 degrees Celsius is being allowed from the stage we are now at?
EU policy is that overall annual global mean temperature increase will need to be limited to 2 degrees Celsius above pre-industrial levels to avoid the most adverse effects of climate change. Stabilisation at such levels will require global greenhouse gas emissions to peak within the next two decades. There are specific bands. For example, emissions will have to be reduced by at least 15% but possibly by as much as 50%. Therefore, there is a large range in the period up to 2050. On Monday next the Council conclusions will restate the main elements of the March EU Council conclusions which indicated that to contribute to the global objective, the Union was willing to consider an emissions reduction of between 15% and 30% below 1990 levels by 2020, and between 60% and 80% below 1990 levels by 2050 for the group of industrialised countries. Wide bands are evident in this respect, but the European Union as a whole has set its targets, which are those required to meet the overall 2 degrees Celsius above pre-industrial levels target.
What specific actions will be carried out to achieve that level?
There is a variety of factors. To give examples, these would include technology change, fuel switching and a variety of other approaches ranging across to better insulation in homes. There is a whole gamut of proposals, although there will be no single silver bullet to solve the overall problem. The target figures will be achieved through a range of factors, including, for example, the buying of carbon credits. This is a legitimate part of the overall global strategy as identified in the Kyoto agreement to reduce emissions from EU member states and other participating states.
The discussions prior to the European Council are extremely valuable and I thank the Minister and his officials for their participation in them. I am not sure I am happy to hear him state he enjoys the sessions.
I always enjoy them.
We may have to do something about that. The principal issue at the Council meeting will be climate change and preparations for the United Nations climate change conference in Montreal. The conclusions reached in the spring of this year at the Council included an EU position on targets, and if similar conclusions are reached in Montreal, we will all be happy with them. The question remains, however, of what will come from it.
At an informal level, does the Minister know if the position of the United States has changed in any way recently, given that country's own tragic experiences of the consequences of climate change? Following from this, I have been struck in recent days by the extent of the tragedy in Guatemala which is also related to the problem of climate change. Some 1,400 people have been washed away in floods but the event did not receive the same degree of attention as the occurrences in New Orleans and other parts of Louisiana justifiably received.
My second question relates to issues closer to home. An item was posted on the RTE website at 2.10 p.m. today stating the consultants engaged to review Ireland's greenhouse gas emissions had estimated that the country was facing a bill of more than €100 million for failing to abide by the limits set down in the Kyoto Protocol. It goes on to describe what are called preliminary projections which the consultants have made of the amount of carbon dioxide which will be produced by various sectors such as transport and industry up to 2012. It states that in the best case scenario it is believed Ireland will produce 6.8 million tonnes of greenhouse gases above the Kyoto Protocol limit. In the worst case scenario it could be 8.1 million tonnes. The consultants have said Ireland will be hit with a penalty of €15 for every tonne it is over the limit. That means we could be hit with a bill for €102 million, if not €121 million. It also points out that others have warned that the market price for carbon dioxide, currently €22 per tonne, could mean the worst case scenario could be as high as €180 million. We are being told the taxpayer will be faced with a bill which could be as high as €180 million because the Government has failed to keep the Kyoto Protocol targets.
It is one thing to say in response to Deputy McCormack that we should have better insulation in housing, yet the European directive on the energy performance of buildings has not been implemented by the Government which is looking for a derogation from it for three years. The Minister will go to his Council of Ministers meeting at which they will discuss climate change. Arising from this, the European Union correctly intends to take a high moral position in Montreal on climate change and the targets which will be met. Ireland is not keeping its end of the bargain. We are not only way over the limit in terms of the environmental consequences, but taxpayers are also facing a huge bill as the Minister attempts to buy his way out of it. Will he tell us something about the report? Was it made to him and what does it include? How much will it cost and what will be its consequences in terms of both our own targets on climate change and the overall EU basket of targets?
The Deputy spoke in the past tense as if something had happened, but we are talking about 2012. Our national emissions are down significantly. They were down 31% in 2001, 29% in 2002 and 25% in 2003. I saw the article to which the Deputy referred. If it was the full story, it would be alarming and the Deputy would be right. However, it is not the full story. It refers to what the position could be in 2012. It must be borne in mind that if any nation is to meet its greenhouse gas emission targets, there is a variety of approaches one can adopt. The most logical approach would be to adopt the least cost approach. One could decide, for example, to close down some industries, which would be a significant cost factor. The Irish position on the Kyoto Protocol targets has been set out over a period of time.
As regards the reports broadcast today about the figure of €102 million——
A figure of €102 million is the best case scenario, but it could be €180 million.
They are inaccurate.
What are the accurate figures?
They are trying to anticipate in 2005 what the position will be in 2012. That does not make sense. The manner in which the question was posited ignores the fact that there are different approaches to deal with greenhouse gas emissions. One of those, which is legitimate and is envisaged in and at the heart of the Kyoto Protocol process, is that if one finds oneself in a situation where one does not meet the targets, one can buy carbon credits. That is the process because we are talking about an entire planet.
The Kyoto Protocol suggests member states can do a number of things. They can radically reform industries or behaviour, change a variety of things or buy credits. It is perfectly sensible and logical if the least cost approach to meeting the Kyoto Protocol targets is to buy credits. One could meet the targets by killing off the entire national herd. However, we will not do so. There is an alarmist proposition that we will face a bill for €180 million. We are talking about the future, about the end of a process and about the period 2008 to 2012. At that stage member states, including ourselves, must have met targets. There is a variety of approaches to it. The broadcasts today are wrong and miscalculated.
What is the correct figure now?
That is like asking what the figure will be in 2012.
What is the Minister's estimate? He said the calculation was wrong. What is the right figure?
The figure of €185 million, which the Deputy calculated, is almost four times higher than the best of the worst calculations. It is in the order of €50 million to €55 million. It is nonsense to talk today about the position at the end of a process when we do not know what that will be. The logical approach for any state is to look at the range of options and to adopt the least cost one. We accept that the least cost option could be to buy carbon credits.
The article goes completely off the rails with the suggestion we are facing penalties under either the Kyoto Protocol or relevant EU law. We are not facing penalties. A core element of the protocol is the buying of carbon credits. That is not facing a penalty. Penalties will only apply to parties to the protocol which fail to meet their targets. That is why it is premature to talk about penalties in 2005 when we are talking about a process which sees its way through to 2012. The focus of the national climate change agenda is to meet our targets. We are not contemplating failing to meet them. No member state, including ourselves, has failed to meet its targets because the targets will come through in the period 2008 to 2012. There is no penalty for any country at this stage.
We must deal with the strategies we will put in place. We clearly outlined what we would do as far back as 2004. We will purchase credits. If one purchased tax credits worth €3.5 million and did not do anything else, the figure would be approximately €55.5 million, not €185 million. That is hypothecated on what would happen in 2012, but we do not know what will happen then. The other suggestion in the media report today that buying carbon credits is a penalty is nonsense when the purchase of carbon credits is clearly envisaged in and a central part of the Kyoto Protocol. Credits will be worked up by some of the developing countries, for example. They will have credits to sell to some of the developed countries.
Perhaps I could comment on that point.
The Deputy asked whether we had had an inkling about the US position, an issue which feeds directly into his second question. He also commented on Hurricane Stan and Hurricane Katrina. I am sure he will agree the rhetoric and discussion which took place at political establishment level in the United States does not suggest there has been a fundamental change in thinking there. There was much debate about the extent to which Hurricane Katrina had or had not been predicated by global warming and the conclusion was that it was in no way related but was part of a cycle of hurricanes. To answer the Deputy's question as truthfully as I can, it seems there has not been massive change there.
The Minister is a little like the person who goes on a mad spending spree in a department store and believes he or she will not be faced with a problem until the credit card bill arrives. We know the protocol will not kick in until 2012 but we also know that if we do not reduce our emissions to a figure of 13% over the 1990 level, we will have to pay a penalty. The Minister is correct in saying this was built into the Kyoto Protocol and the European Union response to it. However, we need to call it what it is — a payment that will have to be made by those countries that continue to pollute. It is the application of the polluter pays principle to the carbon issue. We will have to buy carbon credits. It is all very well saying nothing will happen until 2012 but the process of reducing emissions to what will be required is slow. We have all heard a great deal from the Minister and his colleagues about the great progress being made but I am not sure progress is being made. A document from the European Environment Agency issued on 21 December last states the projections for 2004 were 29.4% above the 1990 level.
Perhaps I can help the Deputy. The projection to which the Deputy refers relates to 2002.
The report states the projections relate to 2004.
More recent figures from the EPA illustrate that overall emissions in 2003 were approximately 25% above the 1990 level and down 29% on the corresponding figure for 2002 and 31% on the corresponding figure for 2001. These figures indicate significiant progress towards the 13% target.
Let us return to the tonnes of greenhouse gases referred to in the report issued today. The report states that in the best case scenario Ireland would be 6.8 million tonnes above the Kyoto Protocol limit and, in the worse case scenario, 8.1 million tonnes. We need to focus on what we now expect we will have to buy. Are those figures accurate?
The figure mentioned by the Deputy is a hypothetical one.
It is a projection.
It is a hypothesis. We know the projections for the past couple of years.
Yes, we do. However, the Minister and his Cabinet colleagues have not been good at making projections.
I can remember a few occasions on which others in Cabinet were not very good at them either. However, that is not relevant to the Deputy's question. The figure to which he referred relates to the position before other measures are taken. If it is cheaper, we will buy credits, as will many other countries. That is the problem with which we are faced.
I know that. The point I am making is that in 2005 we know we will have to buy 6.8 million tonnes or 8.1 million tonnes of carbon credits in the future.
That is not a proper characterisation of the position. That will be the position if we do not take other steps between now and then. The figure used is a projection based on the current position looking forward to the years 2008-2012. The EPA figures show significant progress in that regard. They indicate emissions were down by approximately 29% in 2002 and 31% in 2001.
The Minister has already said that.
If the Deputy accepts that information is correct, he must then accept that we are on target. It will not be easy to reach the target.
The Minister should not try to spoof the committee. We can dispute whether we are 25% or 29% over but the reality is that we are way over target. The net position is that we will have pay for being over the limit. We know what will happen if we do not take corrective measures to address the problem. Under the Minister's watch, the net position is that the taxpayer will have to pay for carbon credits because the Government has not got its act together in terms of reaching the 13% target.
By what year?
By 2010 or 2012, by which time I hope Deputy Roche will no longer be Minister for the Environment, Heritage and Local Government.
I am pleased the Deputy believes I will still be in office in 2013. We will leave that point aside and keep our discussion in the realms of actuality rather than projection. The figures produced by the EPA show we are making good progress towards meeting the 13% target. That is a fact and there is no point in the Deputy or I spoofing each other.
That is not quite what is states.
If the Deputy reads the report, he will note the EPA states the figures were down 29% on the 2002 projection and 31% on the 2001 figure.
I will have found the reference by the time we finish our discussion today.
That is not to diminish the statement that we are faced with a big challenge in reaching the 13% target between now and 2012. We have a number of policy choices to make between now and then. Continuous progress will be made on the issue of emissions; there will be participation in the trading scheme and, ultimately, some credits will have to be purchased. We must decide as a nation which is the most effective or least costly way of achieving the target. If we try to do this in isolation, we will not make the least cost choice which may well be the buying of carbon emission credits because the alternative choices may be more costly. One of the alternative choices may be the closure of some key industries — a costly choice. Any alternative policy choice made to meet the Kyoto Protocol target will be costly. No choice will be cost free. The choice made will carry either a direct or indirect cost. A mix of policies are needed if we are to reach the target by 2012.
I suspect Deputy Cuffe also wishes to pursue the same line of argument.
Yes, I do. I am always a little nervous when a Minister uses percentages of percentages. I followed the Minister's train of thought in regard to the percentage change in the projections for 2002-03 and 2003-04. My understanding of the target is that it represents an average figure in the four year period, 2008-12. What we do in a little over two years time will be very relevant to the size of the bill we will face in 2012. To echo Deputy Gilmore's point, we must get our house in order now. My concern is that the Government has spent the wealth generated in the boom on motorways, peat-fueled power stations, the killing off of rail freight services and other policy choices which are the antithesis of combating climate change. The Minister knows as well as I do that one cannot change the course of a supertanker very quickly, but must begin to alternate its course well in advance. While he referred to the years 2002, 2003 and 2004, we were fortunate in some of them to enjoy once-off reductions in emissions in the Irish fertiliser industry and other detailed methods of calculation. I am not sure a 2% or 5% reduction can be achieved in any year between now and 2008. Perhaps I am wrong, but the Minister said himself there was no magic bullet.
The Deputy makes a very fair point and illustrates the extent to which we are in the realm of hypothesis. The 13% target represents the average figure over the period.
I would use the words "forward planning".
I do not dispute the fact and was agreeing with the Deputy. The Deputy was quite right that in the period he considered, which was dealt with in the last EPA report, there were one-off events such as the IFI closure which had a dramatic downward impact. However, that is not the kind of impact we want as there are associated social costs, which is why we need a more mature debate on the matter. I agree with the Deputy that there is no silver bullet and that a range of approaches are required. My successors and I, although Deputy Gilmore concedes I will be in office until 2013, and others in the Government will have to consider a menu of alternatives which will include some purchasing. We should not fool ourselves. The level and price of purchasing at the time are very difficult to forecast. One can have upper and lower ranges.
I will deal with the issue of infrastructure presently. In talking about the changes industry must make, one must be careful to avoid over-burdening those participating in it. The fact that one must be conscious of the impact on Irish industry has not been factored in well enough in much of the discussion on the matter thus far. I do not agree with Deputy Cuffe's hypothesis that building roads is a retrograde step as we are trying to catch up on the many years in which we did not have the resources to provide necessary infrastructure. My constituency adjoins those of Deputies Cuffe and Gilmore and we all know how liberating the opening of new roads has been and how positive their impact has been. It is a question of getting the balance right. It is a point of political and policy difference between Deputy Cuffe and me that I do believe an absolutist approach is correct. The national road building programme will be continued not only by the current Government but also by those which succeed it because it makes sense. We still do not have the infrastructure we need to develop the State. It is not unpatriotic to suggest we should build roads.
While I take the Minister's point, if the rail freight service is killed off at the same time, there will be a problem. One must look at the transport sector in its totality. I am sure the Minister sees every morning the queue of cars approaching the Loughlinstown roundabout and has noted that average occupancy is very low. Much motorway capacity is being created to assist commuter traffic, even though this goes against most European policies. I put it to the Minister that it will be difficult for him to hold his head up high if he must say we have built lots of motorways to get commuters to work in a hurry at a rate of one person per car.
The Minister suggests we will have to buy our way out of non-compliance as part of our contribution, which I suggest will be expensive. There is no magic get-out-jail-free card on this. If the Minister will pardon me for continuing the criminal metaphor, we must develop a strategy to get the individual on the straight and narrow. While we can purchase bail bonds in a few years, I would like to get people to do their civic duty now. A plan is required to get us back on the straight and narrow, but the national climate change strategy is out of date. The question now is whether the Minister has a revised strategy or will have one in advance of the Montreal talks. The obsolescence of the document must be addressed.
The Minister was correct to point out that we had three options. We can buy our way out, put our house in order by reducing emissions or take the third option of assisting projects in other countries which will reduce their climate change emissions, especially in the developing world. Has there been a specific move on the last of these options within the Minister's Department?
It is part of the green credits strategy. Oddly, an interesting proposition came my way recently from a small Irish company which is creating credits by introducing methane attenuation procedures in large-scale central and south American livestock production units. A great deal will happen in this area.
Are we still at the stage of approaches from companies or is there a formal plan?
The national climate strategy was adopted in November 2000 and remains the platform to address national greenhouse gas emissions. We have a target of 13% above 1990 levels. No plan remains static and the strategy is being reviewed as with any other. The process will be advanced with the publication of the review before the end of the year.
Will that happen before the Montreal meeting?
It will happen at approximately the same time. The meeting will take place in December, which is not the best time to be in Montreal. The review will take into account all developments since publication of the strategy in 2000.
Deputy Cuffe touched on the issue of public transport. While we are not here to discuss that matter, the Government has, by any objective standard, made a greater investment in public transport than any other in the history of the State. We have done so because we are in the happy position of being able to afford it. I do not make the point to discredit other Administrations. We have invested in excess of €2.6 billion since 2002, as evidenced by current railway advertisements. Given that a great deal has been done, it is not fair or reasonable to suggest no action has been taken or that it is all about the building of roads. It is about both.
The Minister should keep a sense of perspective. The consultation period on the twin-tracking of the Kildare line was announced in the final report of the DTI in 1994, but we have not rushed to complete the process. We are only now entering it. While capital investment in public transport has been significant, capital investment in roads has been unprecedented. At issue is the ratio of investment in public transport to investment in roads, on which criterion we do not look very good.
While I respect the view of the Deputy, mine is rather different. The Deputy is quite right on the percentages as until recently we invested derisory amounts in public transport. We must build on current levels on foot of sins of omissions since the 1950s when the rail network began to be scaled back. If we knew where we were going to be now, we would all have made different decisions.
At least I have secured an admission that the level of investment was derisory. It is a significant admission from a Fianna Fáil Minister.
The Deputy will always get admissions from me as I am one of those who believe in putting the hands up.
Good.
My point is that if we are to be frank with each other, we must accept that €2.6 billion represents a huge increase on previous levels of investment. That is all I say to the Deputy. I do not contend we deserve a halo, but that we deserve some credit.
To which I respond to the effect that 20% of 100% is quite small.
Thank God, the Deputy never marked me in college. While it is not a matter for debate here, the point about roads versus public transport involves connectivity. We have a significant challenge to meet on both sides though we will not agree on the approach.
I had three questions. I asked if the climate change strategy was to be updated and the Minister said it would be by the end of the year. I asked if the Minister was considering the third strategy of assisting projects in the developing world and he said he was.
I did not make the point that part and parcel of the purchasing process is precisely the creation of green credits.
My third question relates to Deputy McCormack's point about the way in which we will adapt to the significant 2 degrees Celsius rise. Such a temperature rise will make the potato difficult to grow in Ireland and constitute a much higher risk of flooding in western areas. Has the Minister costed the significant implications of the temperature rise and are preparations being made to cope?
It is not possible at this stage to cost all of the implications, some of the projections for which are quite dramatic. The papers produced at the informal meeting in London, which will be published in due course, represented an extraordinary array of contributions. Interestingly, among the projections made by an EU agency was that Ireland was, fortuitously, one of the countries which would be least impacted by climate change. There will be still, however, impacts including significant changes in agriculture. While maize will be easier to produce, for example, other crops will be more difficult to cultivate. While Deputy Cuffe is correct that sea levels will change, the timescale involved is very long from the perspective of individual citizens and governments, though not from our perspective as a nation. An intriguing aspect of the statistics was the range of options and impacts which will be quite dramatic in some parts of Europe and quite benign in others. While Ireland happens to be lucky to be in the benign area, I agree with the Deputy that we will still face a challenge which must be met with a menu of approaches. While we should be concerned about the challenging targets we have set, we should not get into a lather about what may or may not happen in 2012. We have not dealt with all of the interim issues. Deputy Cuffe drew an illuminating analogy with changing the course of a supertanker. It is a challenge for which one must plan.
The Deputy asked if we intend to take action in three areas, the answer to which is yes. Green credits, the third area about which the Deputy questioned me, is a subset of purchasing.
I thank the Minister for today's presentation. I presume discussions at next week's Council will cover carbon taxes. Are there issues for Ireland on foot of the recent significant increase in energy prices which has had a dramatic effect on consumers and industry? Do references in the REACH regulation to the registration and restriction of chemicals have implications for industry and the workforce? There are significant employers in Ireland in the chemical sector.
Those are two very interesting issues. When our policy was first considered, we examined a range of issues including, naturally, carbon taxes. We made a decision for which we have been criticised, not by all parties opposite, but by the Green Party which has argued strongly that carbon taxes are important to any climate change strategy. I take the somewhat different view that the potential impact of carbon taxes is very much unproven. If we were to follow the Green Party's policy and introduce carbon taxes, we would have to add to the cost of petrol, diesel and home heating oil. What would be the benefit of that? Indeed, the policy implies other costs. If one were to adopt the Green Party approach and predicate much of one's policy on carbon taxes, a very high consumer cost would fall to be met. If one adds to the cost of petrol and diesel as the Green Party proposes, there is a secondary cost in the impact on every consumer item which moves around the country. I have asked the Green Party several times in debates to tell me how much it is proposed to add to the cost of fuels to allow me to make a calculation. I do not know the policies of the Labour Party and Fine Gael in this area as, to be fair, both parties have been silent. While the Green Party has been very active, its policy is mistaken.
According to the Green Party hypothesis, carbon taxes will somehow automatically change behaviour. They would have such an effect only where people were willing to make modifications. The impact would depend on the availability of transport alternatives which do not exist in much of the country for the very reasons we have just been debating. To introduce the policy would be to leave with huge costs everyone who lives in rural areas or small population centres from which one must commute long distances and in which there is no alternative acceptable public transport. It would be a grotesquely unfair and entirely regressive blow to the dispersal which is a formal aspect of Irish population and punish people who wish to live and do business in the country.
The thorny issue which is never addressed by those who become involved in this rather academic debate on carbon taxes is the elasticity of consumer reaction to price. Until recently, which is one of the reasons I praise rather than criticise Mr. Eddie Hobbs, Irish consumers have not been very conscious of their capacity to drive down prices. One sees people driving into service stations advertising petrol for sale at €1.09 per litre while down the road petrol is for sale at €1.06 per litre. As we are still not good at making the difference count, the hypothesis that carbon taxes would automatically reduce consumption is not correct. While they might effect a marginal change in east coast areas in which we have, thanks to a prudent Government, good consumer choices, the reality is that we are wed to our cars. Furthermore, I would not like to be the politician who tried to sell in the current circumstances the idea of placing carbon taxes on home heating oil. It would not be the correct approach in any event. I have considered the argument and read a fair amount of material on it, but I am not persuaded that carbon taxes are the magic bullet.
Forfás has accepted the implications of REACH for Ireland which are not out of line with implications for the EU overall. A great deal of concern was expressed when the REACH proposals were first made that they would have a disproportionately high impact here due to our position as a lead player in the pharmaceutical industry. REACH aims to protect the environment while protecting the competitiveness of the chemical and pharmaceutical industry. It was interesting that the lead responsibility for REACH moved across to the Competitiveness Council, which was not an accident. As Minister of State with responsibility for European affairs when the change was made, I noted a great deal of concern about the appropriateness of the directions REACH could take. A much more balanced approach has been adopted latterly to ensure objectives are not achieved on the environmental side only. It should be remembered that REACH displaces 40 other legal instruments, which is positive.
Are there opportunities for derogations from REACH?
No. There is a long way to go on REACH. The British Presidency has been working on a new text to present to Monday's Council as there have been many changes in the area. The OSOR, an acronym I hate for one substance, one registration, is coming to the fore whereas it was previously a background issue. While we are a long way from finality, Senator Brady is correct to imply that REACH involves one of the areas in which Ireland must be careful. When we speak in the abstract about environmental protection, we must bear in mind the cost to be met. We do not want anything to happen in the context of REACH which would damage the significant pharmaceutical industry we have established over a long period and which is one of the major players in our country. While the above is not to say we should be beholden to the industry or consider matters from its perspective only, we must acknowledge the need to get the balance right. While the fact that the Competitiveness Council plays the lead role now is producing a more balanced approach, we are a long way from a conclusion.
Behind Senator Brady's question is a desire to establish the general feeling on carbon taxes. My personal view is that the hypothetical benefits which would flow from carbon taxes are certainly not proven. I am strongly of the opposite perspective. There are other ways to encourage the reduction of emissions. The motor technology sector has seen the recent introduction of the hybrid car, for which a deal was provided in last year's budget. In Deputy Gilmore's constituency, there is a filling station selling E85, the remarkable ethanol product which is 30 cent per litre cheaper than the top range, lead free petrol. The only problem with ethanol is that there are very few cars on the roads which use it. Those which do are quite expensive, especially where they have dual technology giving them the capacity to switch between standard petrol and ethanol fuel. There are alternatives in the volume of technology which is coming through the system.
This is a very important and useful debate. When I first became a Member of the Oireachtas eight years ago, it took me approximately an hour and fifteen minutes to travel to Leinster House if I left home at 8 a.m. While the Balbriggan and Drogheda bypasses did not exist and there was a lower level of infrastructure in that period, it took me over two hours to travel to Leinster House this morning having left at 7.30 a.m. There appears to be a significant gap in Government policy to provide alternative modes of transport for people coming to the city, especially park-and-ride facilities. If such facilities were in place on the route I use, hundreds if not thousands of cars could be taken off the road. The Government's policy is not joined up in that while the motorway exists, there is no facility to reduce their reliance on the private motor car for people who must travel. There were also fewer SUVs on the roads eight years ago, but there are many gas guzzlers now, which is another example of the failure to implement a functioning, joined-up policy.
I do not disagree with the Minister's views on carbon taxes. Carbon taxes would be devastating to jobs in the cement industry and Premier Periclase in my constituency.
Deputy O'Dowd is quite right. When one drills into the concept of carbon taxes, one finds the hypothesis and the reality are very different. Deputy O'Dowd has demonstrated better than I did that there are consequences as he can see in his constituency.
There is a real consequence. What is the point in terminating employment in Drogheda, only to import——
I am pleased the Deputy is differing so dramatically with his prospective colleagues in Government.
I am not agreeing with the Minister as much as I am thinking of my constituents.
We are not differing on it.
Deputy Gilmore wants to put the price of petrol up, Deputy O'Dowd does not.
I am not in favour of it. Anyway, the Minister will need a great deal of petrol to get to Wexford when he decentralises.
He will have to run. My point is that there is nothing to be gained from losing jobs in Drogheda only to create them in other economies.
I agree fully with the Deputy. One of the factors which has not been taken into account in the debate is the displacement effect to which the Deputy refers. If one were to displace industry, especially heavier industry, from Europe because we want to be good global citizens but where we have environmental standards which are a damn sight better than those obtaining elsewhere, one would contribute to a loss of employment and a reduction of social capital and to further detrimental impacts on the climate. Where activity is displaced outside Europe, older technologies will be used in manufacturing processes. It is a fundamental debate we have not had.
The Minister took the words out of my mouth. Taking all those factors into account and accepting that there will be a cost to get our emissions down, what proposals does the Government have to change fundamentally the way we think by, for example, grant aiding pre-existing domestic dwellings to increase their thermal efficiency and decrease their reliance on fossil fuels? If we fail to change the way we think and the Government is not proactive other than to acknowledge that we will have to pay more, nothing fundamental will be done to change the way we live. Unless we change fundamentally the way we live, we will have done nothing about the problem.
The Deputy's central point is correct. One must pick elements from energy, climate and transport policy as well as from agriculture and industry policy and the manner in which one implements decentralisation.
It is very much a question of spatial strategy.
There is more joining of policies than there was before. Transport considerations, for example, are being factored into the review of the climate change strategy as well as energy policy issues. A more holistic approach is being adopted. We do not differ but realise we face a much more complex and multifaceted challenge than was previously recognised.
We do not disagree in a political sense, but I am trying to get the Minister to answer my question about what he intends to do to encourage people to change the way they live. The difference between the Minister and Deputy Gilmore seemed to involve the degree to which we will have to pay and the actions we will take to change fundamentally what we do.
Those elements are part of the review of policy which is at the end of its life and will be published towards the end of the year. They are also being built into a variety of other considerations. Before Deputy O'Dowd arrived, we had a debate on alternative public transport modes. I am not sure what he has in mind on SUVs.
We do not discourage their use even though they guzzle gas and increase our reliance on carbon emitting fuels. Would it not make more sense, given the Minister's policy of reducing tax on cars like the Prius, to provide that the more fuel-efficient a vehicle is, the less it should cost in terms of taxation to run. The less efficient it is, the more it should impact on the user.
I am sure the Deputy is not proposing a tax on SUVs. I would not be so unfair as to suggest he was.
We ought to explore the issue. It is pointless to discuss saving our planet or protecting the environment if we do not investigate factors that increase pollution.
The Deputy made the point that encouragement is better, with which I concur. That is why, for example, the hybrid car exemption introduced last year was positive. Other attractive technology makes use of ethanol, opening up a stream of further possibilities for us. Ethanol production represents the wheel turning backwards. When Ceimice Teoranta produced white spirits, we had an alternative method of producing energy. That was discontinued but is now coming back into fashion. A challenge arises in terms of the lower duty on a litre of ethanol compared to other products. It has also been pointed out that a finite amount can be placed on the market.
With regard to the issue of the cost of using vehicles of a higher standard than is actually necessary, I cannot understand the attraction of doing so. However, there is such an attraction. There are already motor tax differentials, as the Deputy is aware.
Do they make sense, however? Unless we fundamentally change the way we operate, they will not make sense.
There are two ways by which people's behaviour may be changed. It is better if they are motivated to change. One of the ways to do so, in terms of taxation policy, is to do precisely what was done in the case of hybrid cars. I accept that other knock-on taxation policies also have be examined.
The Minister will not mind if he is surrounded by SUVs in ten years' time.
I will not have a problem if they are all operated using the newer low emission technologies.
That is the key.
I do not want to advertise but vehicles using alternative technologies are coming on stream. I concur with the Deputy in not seeing sense in the matter. The more appropriate approach is the one adopted in the case of hybrid cars. We should explore other ways. There is a problem with regard to the dual fuel car, in that there is nothing to prevent people moving away from the low emission ethanol product made from waste whey by Carberry Milk Products. That company is producing ethanol from formerly problematic material. One of the challenges we face is to make this approach more attractive. A significant 30 cent per litre benefit applies to those buying this ethanol product but it can be bought at present in only one petrol station and used in only one type of car. There are many opportunities for lateral thinking in making improvements.
Have proposals been made on wind energy in the context of the high cost of generating electricity and the use of fossil fuels? The supply of electricity could come into question this winter.
The Government has a renewable energy policy. I have been struck by the number of difficulties that arise for small farmers trying to enter the energy market. While the high cost of connecting into the grid does not come within my ministerial responsibility, it bothers me. We all have views as to where these developments should be located. I am bringing forward guidelines on wind turbines because I want to make it easier for people to become involved in wind energy generation. Difficulties arise in the planning process for this matter.
I discussed with farmers attending the ploughing championship the huge hurdles and costs they must face before they can sell electricity to the grid. I do not want to trespass on anybody else's remit, but certain engineering predispositions may exist to make life difficult for people trying to produce wind energy. I listened to Deputy Cuffe discuss this issue and we are not a million miles apart from each other on it. We have to make the planning process easier without despoiling the countryside. We must resolve the issue of negotiations for connection with the ESB grid and make it less costly to do so. In one case I recently encountered, a person with three or four wind turbines had to meet the cost of installing a 110 kV line. That was an over engineered requirement because a 38 kV line would have been sufficient. Four turbines produce insufficient energy to require a 110 kV connection. It is unfair to expect farmers who are producing wind energy to meet that sort of cost. We will see a more lively debate on that issue in future months and years.
I want to return to one point. I appreciate that we have had a long discussion. The Minister sought refuge in the EPA report when I challenged him earlier on our performance with regard to Kyoto. He gave the impression that the EPA was of the opinion that we were doing fine and supported his complacent approach. The report actually said that Ireland continues to have one of the highest per capita greenhouse gas emission levels in the EU and it rated us as one of the furthest from national Kyoto protocol targets compared to other EU countries. Significant remedial actions are urgently required to address this situation. Referring to the national climate change strategy, the report called for urgent action on outstanding aspects of this plan. Failure to act would be costly and detrimental to the Irish position in terms of future commitments. That is QED in terms of what I put to the Minister at the beginning of the meeting.
No, it is not. It is only QED if the Deputy chooses to read part of the report.
When a State agency expresses the matter in those admittedly mild terms, it is serious. We are not doing the business. During the course of the afternoon, the Minister has indicated that there will be no problems in 2012. I would have expected a more crusading approach to the issue of climate change. We must acknowledge that we have a big problem, which will come home to roost in 2012. Taking the attitude that we do not have to worry now because the issue will not arise until 2012 is not good enough. Will the review of the climate change strategy be published before the end of the year?
It will be out before the end of the year.
Has it been completed?
No, we are working on it. It will be out before the end of the year. The Deputy can take the view that we are always on the edge of a precipice or he can take the more optimistic view that we are working towards a proper solution. He is correct in reporting the EPA's comments, but that was not the totality. The EPA also reported that we are progressing towards our 13% target. The Deputy and I can quote different parts of the report but it would be more appropriate to read it in its totality. It does not suggest the kind of the dismal situation he described.
It is black and white.
The report suggests that we have a big challenge but that we have achieved reductions. It recommends that we review the policies, which is being done. We have to continue to work towards those targets. I do not want to be harsh but the report is more balanced than the view expressed by Deputy Gilmore. The EPA points to the downward trend that has taken place since 2001. The report states that we have a long way to go, which is what I said a few moments ago. We face a number of challenges but we are at least holding a reasoned debate on the issue.
Deputy O'Dowd noted that the solutions are not simple. Carbon taxes will have significant implications for industry and consumers. We need a more balanced approach. No silver bullet exists. A variety of measures will be required. Deputy Cuffe asked me whether three different elements will be involved and the answer is yes. We may fundamentally differ on issues such as carbon taxes but these are honest disagreements between the two of us. The overall costs to the economy and jobs would be far greater than is the case for alternative solutions.
The Kyoto Protocol provides the flexibility to make lowest cost choices. A Government has to make such choices. We cannot be ideological by, for example, forcing the closure of cement plants or other industries represented by Deputy O'Dowd. I will soon be in Drogheda to deliver on the recycling centre, about which the Deputy has been banging on doors.
That will be welcome.
I have also been banging on doors for the Deputy. Kyoto includes emissions trading and credit purchases among other options. It is a complex issue. The elephant which is not yet in the room is the response of the United States to these matters. Europe has to be balanced in its approach. By imposing too many regulations in this area, jobs will be displaced from Europe, where there is at least some environmental control, to parts of the world without any regulation. We are ad idem on that issue.
I thank the Minister for being forthcoming with his replies. I wish him a successful meeting next Monday.
The joint committee went into private session at 5.35 p.m. and adjourned at 5.40 p.m. until 2.30 p.m. on Wednesday, 26 October 2005.