JOINT COMMITTEE ON EUROPEAN AFFAIRS debate -
Wednesday, 24 Mar 2004

Lisbon Strategy - Module 4: Sustainable Growth.

Chairman

This is the fourth module of the consideration of the Lisbon strategy, covering the issue of ensuring sustainable growth. We are grateful to the participants who have agreed to attend the committee to discuss these issues and for the briefing material which they have kindly made available. I welcome Mr. Maurice Coghlan, principal officer, Department of the Environment, Heritage and Local Government and Professor Frank J. Convery, Heritage Trust Professor of Environmental Studies and Director of the Environmental Institute at University College Dublin.

The Lisbon strategy has been identified as one of the Government's priorities for the Irish Presidency. During the Irish Presidency, as members will be aware and the witnesses may not be aware, we will be presenting a report to COSAC, the committee of all the European Affairs committees of the European Union which also involves the European Parliament, which will meet in Dublin and which we chair at present. That meeting will take place here in May and will involve all 25 member states, for the first time, and the European Parliament. This is agreed and it is on the agenda already. We will be compiling a report from this committee which will form the basis of a debate among all 25 Parliaments and the European Parliament.

We are very pleased to have Mr. Coghlan and Professor Convery present. Perhaps Mr. Coghlan would make his opening comments, followed by Professor Convery and we will then have some questions and an exchange with the committee.

Mr. Maurice Coghlan

I work in the Department of the Environment, Heritage and Local Government and I welcome this opportunity to talk to the committee about the EU sustainable development strategy. The EU sustainable development strategy, SDS, was adopted by the EU Heads of State and Government when meeting in Gothenburg in 2001. The SDS is contained in Part II of the Presidency conclusions from that European Council meeting and was adopted following a proposal from the European Commission. It covers national, EU and global issues and, as such, includes matters that are the responsibility of a wide range of public authorities at home and of Council formations at EU level.

It might be helpful for the committee if I do three things: first, outline in general terms the provisions of the SDS; second, look at the Commission's assessment of progress so far with the SDS; and third, set out ways in which the Irish Presidency is contributing to advancing the SDS over these six months. The Gothenberg summit added an environmental dimension to the Lisbon economic and social strategy in the context of sustainable development. The SDS defines sustainable development as development that meets the needs of the present generation without compromising those of future generations. It aims at developing balanced policies that take into account economic, social and environmental issues, and reconcile economic and social advance with a high quality environment. That is a fairly traditional and widely accepted definition of sustainable development.

The SDS contains measures in four key areas: climate change, transport, public health and natural resources. The measures include: meeting Kyoto Protocol commitments on climate change and ensuring the widest possible participation of industrialised countries to ensure the entry into force of the protocol; meeting the indicative target of 22% for electricity produced from renewable energy sources by 2010; Trans-European Networks, TENs, funding, where appropriate, for investment in public transport; action plans for tackling issues related to outbreaks of infectious diseases and resistance to antibiotics; establishment of a European food authority; a new EU chemicals policy to avoid significant impact on health and the environment; and reform of the CAP to increase emphasis on high quality products and sustainable production methods. Further details of the measures in the SDS are contained in the background note which has been circulated already to the committee.

The spring report from the Commission last January concludes that important advances have been made with the EU SDS. For example, some progress has been made in reducing EU greenhouse gas emissions, there has been a decrease in the energy intensity of the EU's economy, that is, the amount of energy used to produce a unit of economic output and new chemicals legislation has been proposed and is being considered and decisions have been made on reform of the CAP. Despite this, the Commission concludes that negative trends in the environment, especially in areas such as climate change, energy, transport and biodiversity, in the three years since the adoption of the SDS have not been reversed and economic growth is still not environmentally sustainable enough.

As far as the Irish Presidency and the SDS is concerned, we are focusing on the future in three ways. First, conclusions adopted by the Environment Council, chaired by the Minister for the Environment, Heritage and Local Government, on 2 March under our Presidency give initial orientations for a review of the SDS which will be undertaken by the Commission later this year. The conclusions refer to the need to integrate better the three dimensions of sustainable development in an ambitious, revised SDS. To this end, the Commission is called on by the Environment Council to finalise, by the end of 2004, the planned review of the SDS on the basis of consultations with the member states and stakeholders and in the perspective of the 2005 mid-term review of the Lisbon strategy, and to report in time for action at the spring European Council in 2005.

In this work, the Commission is invited to have regard to a number factors including: measuring progress towards the objectives of the SDS and the need to define further action, including by enhancing the development and use of relevant indicators for the environment and sustainable development; the need to give renewed impetus to the SDS by developing new overall and sectoral objectives; the results of stocktaking of how individual EU Council formations are doing in integrating environmental considerations into their own work because the environment is a matter not just for the Environment Council but also for the Transport Council, the Energy Council, ECOFIN, etc.; the challenges and opportunities for sustainable development in the context of enlargement on 1 May; and the broader question of incorporating the external, global dimension of sustainable development into the SDS.

The conclusions go on to affirm that the planned mid-term review of the Lisbon strategy in 2005 should take full account of the revised SDS and of the EU's 6th Environment Action Programme, and should also refocus on the imperative of greater environmental integration, notably in the transport and energy sectors. The conclusions call on the Commission, together with the member states, to examine the extent to which the open method of co-ordination could be used to spread best practice and achieve greater convergence towards the main EU environmental goals and to report on this at the 2005 spring European Council. We have given initial orientations to the European Commission in regard to the review of the SDS that will take place at the end of 2004, before ultimately going to the 2005 European Council.

In the context of the SDS and the commencement of the spring European Council, the Presidency, with the support of member states, has identified clean environmental technologies as a growth area that can increase employment, improve competitiveness and secure environmental gain. It is an area of compatibility and synergy between the economy and the environment. On this basis it is expected that the European Council will endorse and call for rapid implementation of an environmental technologies action plan which has been prepared by the Commission in the context of the SDS.

Third, as part of the Presidency, my Department and Comhar, the national sustainable development partnership, will host a conference on sustainable development entitled, Challenges and Opportunities for Sustainable Development - EU 25, in Kinsale on 15 and 16 April. The conference is being organised with assistance from the European Commission, the Governments of the UK and The Netherlands and EU sustainable development councils. It will address the challenges and opportunities for sustainable development in an enlarged EU and build on earlier related events in the Hague and Vienna. The purpose is to provide an opportunity to consider an input to the planned review of the SDS, examine ways of moving towards more sustainable patterns of consumption and production, consider ways to promote increased public and political awareness of and to communicate sustainable development in the newly enlarged EU and provide a platform for sustainable development councils to input into the review of the SDS.

Overall, the Presidency approach to the SDS is intended to contribute to ensuring that the Lisbon/Gothenburg process delivers balanced reforming policies that reflect the economic, social and environmental issues of concern to people. I hope this general introduction is of use to the committee, and I will of course endeavour to respond to any queries and comments the committee may have.

Professor Frank J. Convery

I am pleased and honoured to be with the committee. I want to deal with four different inter-locking themes. The first is the broad interdependence between a good economy and a good environment. For the purposes of the COSAC meeting that interdependence should be emphasised. The second theme I want to touch on is the crucial requirement in this country and across Europe generally to get price signals that tell us we should conserve the environment and that conserving the environment will pay. Specifically in that context, I will touch on the greenhouse gas-global warming challenge that we face in this country.

Third, I want to touch on the very exciting developments in Ireland in research development and the relationship between that and sustainability. Again, that has a direct analogue for the wider European programme because the model that we have developed in Ireland seems to have application right across Europe generally but is especially relevant to the new member states. Finally, I want to touch on a local issue. In those three areas I would give ourselves pretty high marks for developing evidence, thinking through options and essentially making broadly sensible decisions, both in the short and long term.

I know that the final area I want to touch on is highly contentious politically - the issue of one-off rural housing. That has direct sustainability implications and we have not adorned ourselves politically, technically or in any other way by the manner in which we have addressed that issue. Again, the wider European issue is germane because it is coming to the fore in Portugal, Spain and Greece also.

On the first point about the interdependency of the environment and the economy, it is a simple fact that nowhere in the developed world does one find a thriving economy where environment is degraded. Smart people or tourists will not go to a clapped out environment. One cannot have a top end food industry in such environments. They are incompatible, so any towns, countries or communities that decided in the modern world to trade off a high quality environment for economy essentially just shoot themselves in the foot. The evidence across the planet is very compelling in that regard, and it is an important message for this group to take to the wider European agenda, where it may not be clearly understood.

The second issue is the use of prices and incentives, and I wish to focus specifically on the global warming issue. Mr. Coghlan mentioned the fact that Europe wide, we are not doing too badly in meeting our Kyoto commitment, which essentially sets a cap on the volume of greenhouse gases that we are allowed to emit. However, that cap was allocated to the existing 15 member states, and ourselves and Spain are wildly over target. We have no hope of complying with the target unless we take serious, sensible and cost effective action.

It involves two actions, one of which we have already taken with our European partners - to introduce an emissions trading scheme. One decides how much of any pollutant one is willing to accept, which becomes the cap or envelope. One then allocates that cap to all the firms that are emitting that particular pollutant, which is normal regulatory practice. The big innovation, however, is that those firms are allowed to trade so that, for example, if my cap is ten and Mr. Coghlan's cap is ten and if it is very expensive for me to get back down to ten but very low cost for him to go from ten to five, he can reduce his emissions below his cap and sell me the surplus available. At the end of the year there is an accounting process, and the rule is that one has to cover one's emissions with one's allowances. One has to hold enough allowances.

Out of that trading one gets a price signal, in this case a price per tonne of carbon under the European emissions trading scheme. The estimated price per tonne would be about €12. It is an excellent system because for the first time in our history we have a price signal. Whether it is Cement Roadstone, Aughinish Alumina or even UCD, they all have a cap. If we in UCD can reduce our emissions below our allotment at a cost of less than €12 per tonne, we can sell that surplus to somebody else and make money out of it. It creates the profit incentive in the environmental domain. That is happening Europe wide in January 2005, and it is hugely significant for the Lisbon process because it allows Europe to meet a lot of its obligations at very low cost.

If one is an emitter in Ireland and there is somebody in the Czech Republic, Poland or wherever that can emit at very low cost, one can buy one's allowances from them. However, that signal only covers about 40% of our emissions so it is very important that we introduce a tax on those emissions that are not covered by the emissions trading scheme. While nobody likes taxes, we can ensure that we take care of competitiveness effects by essentially allowing any company that meets best international practice to be exempted from the tax.

I am chairman of Sustainable Energy Ireland. We have done a pilot with industry and come up with an excellent negotiated agreement model so that if one is trading internationally one can escape the tax by opting into this scheme. Similarly, poor people who are very vulnerable to rises in fuel prices need special transfers and support. Along with those two provisions we need a strong effort at information so that every household that sees its bill going up by, say, 10% should be immediately able to access a set of measures they can take to reduce fuel consumption by 10% and essentially bring its expenditure back down to where it was.

Sustainable Energy Ireland is working on a package of measures to make it as easy as possible to conserve energy. Since electricity prices also rise, the ESB too should be obliged to provide households and other electricity users with a series of energy reduction measures, such as free long-energy light bulbs. Its performance in this area is currently very poor. If we all installed those bulbs in our houses in the morning, we could reduce our energy consumption by 7% or 8%. We need to have that signal, because without it we cannot drive the Kyoto requirement to successful achievement.

The third area, on which I will not dwell so much, is research and development. We were probably the most negligent country in this area until about five or six years ago. For example, no Irish university rates among the top 100 research universities in Europe. In terms of becoming research players, we are moving from a very cold standing start. Virtually everyone now realises that unless this country becomes a knowledge economy, and unless we switch from standard production to process development, we are, economically, dead in the water. That message has been accepted. We have set up a mechanism, Science Foundation Ireland, as well as two well-funded research councils. The universities, including my own, UCD, are completely reorganising themselves to become serious players in this arena.

That is a very good story. It has sustainability implications of course, because as one moves up the knowledge chain one moves into cleaner and more environmentally benign activities. One automatically becomes consistent with the Gothenburg requirements.

The European Union needs to improve its performance in the R& D area generally. The Science Foundation Ireland model has a lot of potential for Europe. Regarding the report for COSAC, what we have done in this area and what we have to offer there, in terms of coherence and serious joined-up government, is worth promoting strongly. For example, in the Finance Bill currently going through the Houses, there is a 20% tax credit for companies investing in R&D. We are putting infrastructure and money into place in the supply side, and driving the demand side.

The final theme, about which I am much less happy, is the rural housing issue and the ongoing debate. Looking at it from a research academic point of view, the fundamental problem is the utter vacuousness of the debate, in the sense that there is virtually no serious analysis or evidence to support propositions on either side of this rather tangled story. The result is that we are rapidly drifting into a situation where it is possible, though not inevitable, that we will encumber rural areas in particular with major costs and disabilities which will essentially hobble them in terms of achieving sustainable development. In my paper, I worked through a few issues which are germane. My frustration derives from the fact that the issues involved are eminently researchable. This is not an area where ignorance is a requirement. Knowledge can be had. We can behave as we have behaved in other areas, in a much more substantive and informed fashion. So far, however, I see no evidence that we are doing so.

There is the matter of consumer preference. What do people want? There are very good techniques for teasing out the answer, whether it be cluster development or one-off housing. There is a presumption that we all want to live in our own little manors in the countryside, but no evidence to support that. My own instinct - a proposition rather than something based on evidence - is that people are going for the one-off option because it is the cheapest, the only one they can afford. I posed the choice between 200 houses placed in a village in a cluster setting, or else sprinkled through the countryside, and my proposition is that for reasons I will enumerate, people would be happier with clusters than with one-off development, if they had that choice. Currently they do not.

I have with me an excellent paper on water quality which I will leave for the committee. Written by Donal Daly of the Geological Survey, it is a very thoughtful analysis of the implications of one-off development for ground water. The facts are straightforward. About 40% of Irish soils cannot and should not have septic tank technology. For the other 60%, the traditional septic tank, properly installed, will work quite well. For the 40% it will not work, and if it does not, one then has to use advanced treatment. About 15% of our soils should under no circumstances have any kind of non-sewaged treatment. The question is whether, with the current model, we will refuse people. The implications are very serious because as Donal Daly notes, the potential for pathogenic infection in our ground water is quite serious. As the density increases, the risk increases accordingly, or even more so, showing an exponential increase. There are nutrient problems, and if, as could happen, it turns out that we do not comply with European Union regulations, Ireland Inc. will be fined, and all taxpayers will probably have to pay a very substantial fine.

That need not happen. Donal Daly goes through the various steps that could be taken to ensure that we do not gratuitously destroy our ground water. We are taking some but not all of those steps. If we end up ten years from now with a debased ground water resource, posterity will spit on our graves, because we will have sleepwalked into the situation when we did not have to.

It is obvious to anyone in the economic development world that broadband access is the crucial passport to modern industrial development. Anyone who wants to start a business anywhere in Ireland in the 21st century must have broadband, or will otherwise not be a player. A very good scheme is currently available. The Broadband Action Plan has invited cluster proposals from people. That feedback will give us very good evidence as to whether, and under what circumstances, it is feasible to bring broadband to rural communities. My guess it that unless people are living in clusters, it will be very expensive, and probably not feasible in some cases. If we give ourselves a pattern of development that essentially precludes large proportions of our populace in rural areas from access to broadband, we will have essentially tied our hands behind our backs.

Regarding tourism, the evidence is not clear, but it must be asked if the model on which we have embarked will damage the tourism capacity in significant parts of rural Ireland. One hears a good deal of anecdotal evidence that it will, and that black spots will be created in parts of rural Ireland. Tourism-wise, urban Ireland will continue to thrive, but parts of rural Ireland may simply be eliminated from the international tourism calendar, while it will probably continue to work for domestic tourism. Once again, we are sleepwalking in this area, since there are excellent techniques and surveys available. One can do serious research to see whether and to what extent the worst-case scenario I am painting has some validity, and to see what we can do if it has not. Once again, ignorance is not bliss in this area. Similarly, it does not take a genius to see that cluster development generally makes public transport much more feasible than dispersed development. There is some piloting with different rural transport schemes with evidence that can be marshalled to test this proposition.

I am acutely aware of the social services issue because my wife is the director of services for older people in the east coast region. She is aware that when older people, often living alone, are in a cluster type development and they can no longer drive, walking to the shops is a huge gain, as opposed to the isolation of a car dependent spatial set-up. It is the same if they need meals-on-wheels or other drop-in services. For older people - and others - who require social services, independence is the primary goal. It is their single asset that they will cherish until the end. They only want to be dependent when it is absolutely the only option available to them. We have not systematically teased out the implications for social service provision to people for whom isolation is a particular problem in this regard.

I apologise Chairman for elaborating at some length on this issue. However, the points I raise are important. I have been somewhat parochial on my last point, but there is a European element to it because countries in the Mediterranean zone are going more or less in the same direction. I suspect that many of the accession states will also be grappling with spatial policy. If we have any insights to offer them, it would be very valuable.

Chairman

I thank Professor Convery for his interesting presentation. He has given us much food for thought.

Deputy Carey

I agree that the contribution has given us much food for thought. Reading through Professor Convery's paper, I cannot disagree with any of his thesis. He referred to sustainable development and emissions issues, the groundwater directive and by implication rural housing. Mr. Coghlan from the Department of Environment, Heritage and Local Government spoke of using the open method of co-ordination to develop best practice. How can policies be developed around the open method of co-ordination to give effect to the objectives which Professor Convery outlines in his paper?

Deputy Harkin

I thank Mr. Maurice Coghlan and Professor Convery for their easily understandable contributions. What progress has been made on an Irish and European level for revising the guidelines for the trans-European network, where priority would be given, for example to rail travel and freight? What progress has been made on the EU integrated product policy, such as reducing use of resources and the environmental impact of waste?

The rural housing issue is one that is close to my heart. Professor Convery made the point that the arguments tend to be two-sided. However, that should not blind us to the many statistics available, such as the census and CSO figures. The most recent census figures show that in areas where 150 to 500 people live, the increase in the inter-census period from 1996 to 2002 was 18%. At the same time, the population in rural areas where less than 150 people live has increased by approximately 3.9%. Regardless of what some say, it is clear that rural areas and communities are simply not regenerating.

The recent CSO figures over the last three quarters show that 33% of housing is either of the detached or bungalow type. For example, I live in Sligo town in a detached house and yet this would be included in that 33% figure. Not even one third of houses are one-off rural houses. Considering that approximately 33% of our population would be termed rural dwellers, rural areas are not regenerating. If one checks An Taisce's website, it states that 43% of houses being built are one-off. This is not true and the CSO figures do not back that up.

Professor Convery stated that price is a key determinant. However, from my limited experience, there are other reasons why people choose to live in rural areas, such as a sense of place and the genuine desire to move out of urban areas. Price plays a role but it is only one part of it. In his paper Professor Convery said that in unsuitable sites, advanced water treatment systems can work. They do work and the EPA stated in its millennium report that properly sited treatment systems do work. As Professor Convery stated, we do not have to stay with traditional models as there are new ways. The most recent EPA report on groundwater quality, while it indicated that more progress needs to be made, stated much has been done. As Members will be aware, various schemes have been put in place by local authorities to upgrade water systems. I am hopeful that in two years' time another groundwater study will show better results.

Professor Convery claims that in many rural communities tourism is the main source of earnings and employment. That is factually incorrect. In County Kerry, the tour buses may go around the Ring of Kerry, but they start and finish in Killarney - an urban centre. The rural communities get little of the tourism spin-off. It is also the case in counties Sligo and Leitrim. Rural tourism is decreasing while urban tourism is increasing. The adequate number of houses for rural community regeneration are not being built.

Professor Convery will be aware that the most recent report from the CSO on transport, energy and travel time was only published in the past few weeks. It stated that rural travel time to work is shorter than urban travel time, even though the distances are longer. None of these issues are simple. I am not suggesting that Professor Convery said they were. They are complicated and need to be teased out. Some of the information needed to make decisions on them is already available to us.

Senator Bradford

I welcome the visitors to the committee. My lines have been stolen by Deputy Harkin, who expressed my ideas more clearly than I would have done.

I was taken by Professor Convery's comments about rural housing. I am sure he would be a welcome guest at a meeting of the Joint Committee on the Environment and Local Government, where a broader consideration of the Government's recent pronouncement on rural development is taking place.

I agree with most of what Deputy Harkin said. I take on board the strong wake-up call that Professor Convery has given us. The debate in the last five or six weeks on one-off housing and rural dwellings has taken place in the context of an ongoing emotional debate about people's entitlement to reside in their local area or place of birth and the desire to ensure that rural Ireland is well-populated. We have probably not yet given a sufficiently deep consideration to the environmental aspect.

I was worried by the figures presented by Professor Convery about waste management systems in rural areas, for example the fact that at least 15%, if not 20%, of sites are unsuitable for any form of waste management system. As someone who deals with planning permission queries almost on a daily basis, I am aware that when there are difficulties concerning conventional septic tanks, the view of politicians, with which council management fairly readily agrees, is that new waste management systems can solve problems. I am interested in what Deputy Harkin has said about the success of the new systems.

I recall that there was a big dispute at a council meeting approximately 18 months ago about the apparent success of the new treatment systems, such as the biocycle and puraflow systems. It was suggested to us that such systems are not as successful as we consider them to be. We attempted to get fairly definitive information from the Department at that time, but I do not think we received conclusive figures. Perhaps Professor Convery might indicate the actual success rate, if that is the appropriate term, of the systems. We feel that they have solved many planning queries and problems as they have been put in place, but I would like to assure myself, those who use the system and their neighbours that such systems work well. Perhaps Professor Convery can give us some indications in that regard.

We have to take on board what has been said in the context of the debate on rural housing. The Government's announcement of recent weeks will lead to further work. We have draft proposals, but there are no final proposals. Submissions will be made by all interested parties. I am sure the arguments that have been put forward will be taken on board. They need to be taken on board so that we can strike the right balance.

I would like to ask about waste management in the context of sustainability. As a former county councillor, I know that waste management is the most emotive question at local authority level. We are all in favour of waste management as long as the favoured solution is not in our own county or constituency. The national debate does not seem to have concluded. We are trying to provide for best practice, but there seems to be a different version of best practice in almost every county. I come from the parish where part of County Cork's waste management solution - a landfill site - will be located. It will be part of a broader system, which will also involve waste separation and a material recovery facility. If that is the best solution, I am willing, politically, to live with it. Incineration is being considered in other counties, however, and it seems that it is the Minister's preference.

I am not an environmental expert, but I find it a little confusing that we do not appear to have an agreed national system of best practice for waste management. Incineration seems to be the accepted norm in many European countries, but it does not seem to be politically or environmentally acceptable here. In a country the size of Ireland, it should be possible to have a definitive bottom-line statement of what is best practice and sustainable in respect of waste management. If County Cork is getting it right and what is happening a stone's throw from my back door is right for County Cork, I am willing to live with it. However, that means that other counties are getting it wrong. Where does Professor Convery think the debate on waste management stands? Although it is emotive and politicised on occasions, we could all live with the answers if they were clear, definitive and seen to be acceptable and sustainable. I am disappointed that we have not yet reached the conclusive waste management phase.

There has been a further announcement in the past couple of weeks about the pay-per-weight system, which I support fully. How does the system fit with incineration? I am aware, from my limited knowledge of incineration, that it only works with large volumes of waste, if it can be said to work at all. Incineration does not appear to work in conjunction with a waste separation and reduction philosophy. I am aware that I have drifted a little from the central issue being discussed. Perhaps Professor Convery can offer some comment on the notion that waste management must be based on sustainability.

Deputy Andrews

I welcome the guests to the committee. I do not blame Senator Bradford for drifting from the matter under discussion, as the Lisbon agenda is a broad topic. Matters such as groundwater, transport, climate change and public health have been discussed today. The breadth of our interest this afternoon has been remarkable. I am not sure if we can achieve anything, but it is worth taking stock in the context of our Presidency and our growth and employment ambitions.

I wish to reflect on the original intention of the sustainable development strategy. Can Mr. Coghlan tell me whether environmental proofing of policy is happening across the European Union? Is there evidence that the initial aim of the strategy is having any real effect? What does the Joint Committee on European Affairs think about the environmental impact of the policies it reviews as part of its normal day-to-day activities? Is the strategy borne in mind by the Civil Service, the Government and Oireachtas committees, as was the initial aim? Is such consideration happening as a consequence of the Gothenburg decision? I would also like to ask Mr. Coghlan about sustainable transport. The decoupling of transport growth from GDP is one of the Gothenburg aims, as Deputy Harkin mentioned earlier. Can he elaborate on whether there have been any achievements in this area?

I would like to respond to Professor Convery's comments. I am a little on the edge of the rural housing issue - it has not crossed my desk, from a constituency point of view. I listened to all the points he made. One of the arguments in favour of the type of rural housing advocated by the Minister for the Environment, Heritage and Local Government, Deputy Cullen, is that if one lives in an isolated or peripheral area, say ten miles from a cluster of houses such as Professor Convery described, one is no less entitled to the social services he mentioned, such as transport, broadband, etc. Professor Convery says that the provision of such services to a one-off house that is ten miles from a cluster of housing involves an added cost, by comparison to the cost of providing the services to the cluster. If I have been living in an isolated house for many years, nobody would argue that I am less entitled to broadband, proper water services or transport facilities. In such circumstances, what is the extra cost of providing the services to those who live between the cluster and existing peripheral houses?

Deputy N. O’Keeffe

I am here in substitution for Deputy Mulcahy, who is abroad. This discussion is interesting from my point of view because I am committed to the development of rural Ireland, including sustainable development and housing. One of my great concerns in this new debate on rural housing is the serious threat to groundwater. The representatives' presentation referred to the rock structure in our country and the problems that result from this.

All over the country major discussions are taking place in local authorities about high nitrate levels, which are blamed on the farming community, whose members use high levels of organic nitrogen. With the structure of our underlying rock, especially white limestone, which fractures easily, it is easy for this pollutant to leak into the groundwater. If we are to have a large volume of housing this will add further to the problem. We have seen planning applications being refused in Roscommon because it has the highest levels of groundwater pollution in the country. Some appeals to An Bord Pleanála have been successful, however. We must be careful when dealing with this area.

My constituency colleague, Senator Bradford, mentioned biocycle septic tanks as a possible way forward. That is only a half-measure, as anyone will realise, because these tanks do not have any soaking capacity if the ground is of the wrong kind. There have been incidences of leakages and heavy pollution in drains and dykes in many rural areas arising from septic tanks and rural development. At meetings of Cork County Council there have been motions from people requesting sewerage facilities for developments of four or five houses. We have a group water sewerage facility, as we do for the public water supply, which is not attractive enough to be availed of. Many problems will arise in this area.

There is also the problem of intensive farming, which its attendant noises and smells which ruin the environment. This will cause many difficulties. As the population increases, which is to be welcomed, it will become more difficult to farm intensively. We must take this into account. Waste management is another important issue. Refuse collection will be increasingly required in rural areas. I am a farmer myself, and yesterday morning I was looking at the amount of waste that had come into my farm over the fence from the main road during the weekend. It was a substantial amount, but it will all be incinerated. I do not understand why we did not grasp the nettle in this area long ago. There are only two countries in the world that do not use incineration, Greece and Ireland. It is the cleanest, safest, cheapest and most productive way of disposing of waste.

A major debate is taking place in the southern part of my constituency on the proposed incinerator development at Ringaskiddy. I believe this development is ill advised and that the people are not properly informed of what is going on. I have seen people from rural areas who are as vehemently opposed to it as those from urban areas. Some of those whom I have seen at meetings and who have been lobbying me would have a major contribution to make to an incinerator because they produce huge volumes of waste through agriculture. This is an important issue that must be dealt with.

I was interested to hear the discussion about broadband access. I was watching the Eircom re-floatation, which failed to take off. We thought that broadband would be the way forward and that there would be major input into it and it would be a great success for Eircom. The investors did not see it that way.

These are the issues I would like discussed. The issue of rural housing is one that needs much further discussion. I am a Government TD and I am aware of the policy of my Government and the Taoiseach's commitment to rural Ireland and rural housing development, but we must also consider the environment and the problem of groundwater pollution. The nitrates directive from Brussels has resulted in much discussion. Many of the problems of high nitrate levels and bacterial infestations in water are the result of septic tanks.

Chairman

I found the contributions very interesting. I have a question, although I do not know whether the representatives can deal with it in the context of sustainable development and the Lisbon strategy. I am concerned about urban villages - villages in Dublin, for example. This is an issue that may also apply to many applicant states and some of the existing member states. A report was recently circulated to Members of the Oireachtas by RGDATA about the decline in small retail outlets in villages in Britain. About 30,000 or 40,000 of these had closed. Throughout Dublin city many village facilities are threatened; for example, post offices are difficult to sustain.

I grew up in the village of Inchicore, which was very attractive - the cobblestones and tram tracks were still there although the trams had long since gone. Today, the village is almost derelict and has been for some time, as can be seen from the shop fronts. Much private development has taken place; many apartments have been built. This is happening throughout the city generally. However, many of these apartments are closed off from their local communities. I have heard anecdotally that the people who live there are usually registered to vote in Roscommon or wherever they consider their roots to be. This means that even though we have people living in high-density developments, they are not part of village life and they are not helping to sustain their local areas. The local areas then become less attractive.

Has any consideration been given to this element of city life? There are implications for the tourism industry and so on. For example, the founder of the first Government of the Free State, W. T. Cosgrave, is buried in Inchicore and Kilmainham Jail and the Royal Hospital are on the periphery of the village and contain much of historical interest. When we think about sustainable growth we do not usually think of cities. This also applies to the types of transport we must consider for our city - whether we can sustain an underground system, for example. Has any thought been given to this issue?

One thing jumped out at me from Professor Convery's presentation. He stated that if Germany was not included in the calculations, the economic performance of the EU over the last decade would have been comparable to the USA and that a number of smaller countries, including Ireland, had done much better. This is fascinating. To what does Professor Convery attribute this underperformance on Germany's part? Is it the cost of reunification? That is not something that has been demonstrated to us before. We have constantly been given to understand that because we have a system that is more geared towards social services than that of the USA, our economy cannot compete. I would like Professor Convery to develop that point.

How can the Union implement policies which will have a short-term cost when other countries or trading blocs, for example, Russia and the USA, do not have short-term costs? If it is an issue of competition, how can this be addressed by the Union? What about the acceding states? In many cases they have inherited disastrous environmental problems. How can they be assisted? Perhaps the representatives of the Department of the Environment, Heritage and Local Government might explain the role the EU can take in assisting the accession countries in dealing with these issues. What about our own energy supply? Is there a risk that we may become dependent on renewable energy sources?

Mr. Coghlan

Thank you, Chairman. There are many questions. Sustainable development is a very broad agenda and that may be part of the problem. Certain definitions can include everything in economic, social and environmental policy, including all interactions between them. It is very difficult to put one's finger on it. It is like an elephant; one knows one when one sees one but it is difficult to describe sometimes. It is not possible for one Government official to deal in detail with all the issues but I will try to deal with those that have been raised.

Deputy Carey referred to the open method of co-ordination, particularly in the context of planning and one-off rural housing. Planning in general is not an area of formal EU competence within the treaties, hence there tends to be sensitivity among member states generally at suggestions that Community competence should develop specifically in the area of planning. Member states will want to take that sensitivity into account in considering whether to use the open method of co-ordination which, as I understand, is a developing area. At the very least it is an exchange of information and best practice between member states in areas that are not formally within the treaty and the subject of Community competence.

Conclusions adopted by the Environment Council in March reflected elements of caution on this issue. The conclusions merely invited the Commission to examine the extent to which the open method of co-ordination could be used and to report back next year. I believe that reflected concerns among member states lest EU competence develops in areas that they might not wish. On the other hand, others might see the open method of co-ordination as a less than satisfactory substitute for Community action. There are important policy and political issues in and around it. Member states and the Community as a whole will wish to consider before fully developing the open method of co-ordination in that area. It will be the subject of detailed co-ordination and consideration over the next year.

Senator Harkin referred to trans-European networks, TENS. Progress has been made on guidelines in relation to the TENS, including in the context of the European growth initiative agreed at the European Council meeting in December. My colleagues in the Department of Transport would be able to fill in the details.

On integrated product policy, the Commission has developed a number of policy papers, including a Green Paper on which conclusions have been reached at EU level. The next steps are for the Commission to come forward with specific proposals on specific products.

Deputy Andrews asked about environment proofing of policy. The original SDS contained a commitment at EU level for the Commission to undertake what it calls a sustainability impact assessment of new proposals that are coming forward from the Commission. That has been done in a number of cases. At national level, the directive on strategic environmental assessment of plans and programmes is shortly due to come into force. As a general answer to the Deputy's question, some work has been done in this area and initiatives are under way but a lot more progress needs to be made before we reach the stage where there is full environmental proofing of policy and plans and programmes and full integration of the various dimensions of sustainable development when considering policy issues.

The Deputy also asked about decoupling transport and the environment. The Commission's spring report for this year reports that at European level - I am sure the same is true in Ireland - figures for 2002 still show no signs of a decoupling between GDP growth and rises in transport volumes. One of the closest correlations one finds in this area is that between car purchase and transport volumes. It highlights the difficulties in controlling transport demand in line with environmental considerations.

The Chairman asked about various urban issues. I suggest that Professor Convery is more expert in that field than I am. At EU Commission level, work is under way on the development of a thematic strategy and policy proposals in relation to the urban environment which may indeed include consideration of some of the types of issues to which the Chairman referred.

Chairman

I do not wish to take advantage of the situation, but the big difficulty is in the area of design and planning permission. What happens is that developments become locked away as villages within villages. The residents are not part of and cannot be contacted by the community for festivals or anything that might be organised. They do not support the shops. The issue of living behind gates and locked away means that these people do not regard themselves as part of the community and they do not put down roots. Their children do not go to the local schools. I suggest it as a subject for some strategic thinking. I apologise for interrupting the speaker.

Mr. Coghlan

With regard to short-term and competitiveness issues, the Chairman is correct and this is at the heart of much of the debate on environmental policy and its interaction with economic policy. It sometimes appears to some commentators, although it is not necessarily always the case, that environmental policy brings short-term costs and that these are unacceptable in difficult economic circumstances, especially when partner countries are not following the same priorities or sustainable development agenda. It is difficult and it highlights the need, particularly in the context of Kyoto but also in other contexts, of working with partner countries in the international community to convince them of the merits of the approach that is being followed, believed in and considered right at a European level. We must work hard to convince them of the merits of action to set aside short-term costs in the interests of the long-term benefit. It is also a matter for political decision, ultimately, but the question comes down to whether at times the EU aspires to international leadership and is prepared to make decisions of that nature.

On the question of accession countries, they face major challenges in complying with the environmental acquis of a variety of dimensions. It will be an area for priority consideration in the new EU funding envelopes post 2006.

Professor Convery

I thank the Chairman for his interesting and insightful comments. With regard to some issues to do with rural housing, in terms of the number, it puzzles me why An Taisce and other proponents on the other side of the argument become exercised about whether it is 43% or 22%, because that is not the point. The point is that if the proportion is 5% but the houses are on the 10% to 15% of soil that should not take any non-sewered waste, it is a disaster. If the proportion is 45%, but they are located on deep one to two metre soils that can absorb conventional septic tanks, then from a water quality point of view, we do not have a problem. People become excited about them but the percentages are not the point.

In terms of what people want, the main thrust of my argument is found in the kind of jargon one hears in universities and elsewhere regarding evidence-based policy. It is a simple matter. It costs approximately €70,000 to €80,000 to undertake a 1500 household survey that is statistically robust within plus or minus 5% and which will accurately give the answers to what people want. If the survey is carefully designed one can find out all kinds of things. However, it has to be done independently and it has to be serious work.

One hears anecdotal horror stories and good stories about the advance treatment systems. If a survey was undertaken of these systems that, say, examined a 5% to 10% sample of properly chosen properties, we would have accurate information on their performance and their problems. However, we have not done that. It is all pub talk or not much better, therefore, we are essentially dealing with the issue in the dark.

The same applies with tourism, where the question is how dependent are parts of rural Ireland on this industry. I accept that some places are virtually independent, others have a moderate dependency while others are very dependent and probably - again this is an hypothesis - in some places it is the only game in town in terms of their future economy and growth. There is much expertise on this and serious analyses and surveys of visitors before and after can be undertaken which involve all kinds of sophisticated techniques that can inform the discussion, yet we have not done it.

We could be all very lucky and none of my worst fears will happen but there is a downside risk across the spectrum. I am taken with the concern expressed in Cork that considered questioning needs to be pressed to its logical conclusion.

The entitlement issue and so on is fascinating. If, say, we give ourselves a more disbursed settlement pattern than otherwise would be the case, and if that increases the cost of social services and, for example, broadband, what will happen? One outcome is that people will get less services. Take broadband as an example. As the committee will be aware, the action plan provides €35 million per year up to 2007. If one can service X houses that are clustered and X minus Y houses that are unclustered with that envelope, the choices are to increase the envelope, which means taking money off somebody else for some other purpose, by either increasing taxes or diverting funding from some other area, or - and this is probably what will happen - people will do without. They will get inferior services. It is important to know what are the choices and the trade-off.

My main concern is that in rural areas farmers and those who depend fundamentally on rural Ireland could end up being short changed as assets get dispersed. Those of urban origin tend to be very effective lobbyists. Every modern farmer will need broadband and should get it. That is their business and they need to be supported, yet they could get lost in the process. The main plea is for evidence based policy and choices across the spectrum. We can and should do it.

We have been desultory in getting to grips with the waste management issue. it. When one looks at it as an economist, it is clear that pricing has a huge role to play. The Monaghan scheme, with which some members will be familiar, has introduced weight-based pricing for the past couple of years and deliveries to landfill have dropped by 30% to 35%. My house in Dún Laoghaire got a sticker telling us we will be on a weight-based pilot scheme. The next day I bought a composter and will be diverting probably 40% of my bin contents as a result of the pricing issue. We should have given these strong signals before dealing with contentious issues, such as final disposal choices. Having said that, it will only be possible to get up to 60% of waste re-used or recycled. It will still be necessary to do something with the remaining 40%. The big concern with incineration is a downside risk if it is not operated properly. If it is a state of the art plant that is operated to highest standards, my reading is that there will not be a problem. If, however, there is dysfunctional management or if something goes wrong one could have a problem. Managing the downside risk is a key issue.

In terms of retail outlets, one of the interesting policies is the imposition of a cap on out of town shopping centres, which means it is not possible to develop the big box American model on the motorway, which sucks all of the retail purchasing power. In the Dublin case, say, on the M50, such schemes would pull out from the city but would also suck in from the surrounding towns as far as Athlone. We have avoided the worst problems in that regard.

I agree that we should not have gated communities and should put a far bigger effort into design. Some of the village community developments have been terrific in that regard. There have been tremendous successes but there have also been huge failures. It is partly a failure of governance. If, say, Inchicore had a serious council that acted as a cohesive voice for the community and if the planning was designed to make the quality of life economically, environmentally and socially terrific there, the outcomes would be different. That is an issue.

There are several books being written about why Germany is in decline. Reunification is part of the reason, as are the political peculiarities the German system. It is a huge problem and because Germany is on the floor we are all dragged down. Unless Germany, with 80 million people, gets going - and it can - we all have a big problem. In the past it has been one of the most productive and creative countries in the world.

In terms of the short-term versus long-term cost, I will deal specifically with the greenhouse gas and global warming issue, where Europe has opted in and the US and developing countries, especially China and India, have not accepted a cap. The way to deal with that is to use pricing, as we are doing, by creating an emissions trading scheme, give businesses allowances and allow them to trade. One does not tell people what to do. It is not a regulatory system. One can say, "pay the price or reduce your emissions. The choices are yours". That incentivises all kinds of interesting new technologies and one gets what is called the Porter-hypothesis, which is that when one creates that kind of dynamism, an economy creates all kinds of new technologies that can be sold globally. One can get a win-win situation, as Mr. Coughlan said, if it is done properly. That is why in Sustainable Energy Ireland we have pushed strongly for a negotiated agreement model so that companies that are under competitive stress can opt out of paying taxes and so on if they meet certain standards. That is very important.

On the renewal energy issue, the electricity grid in Ireland is largely self-contained. We have a small inter-connector with Northern Ireland but it is unconnected to the wider European grid. As a result of that, the cap on what can be absorbed at reasonable cost by the system, in terms of wind power specifically, is up to 20% but not more. Essentially, that is the cap with which we are faced. If one goes to places which have interconnection, where the constraint is relaxed, such as Denmark and northern Germany, for example, one can get up to 50% or 60% absorption. The Minister for Communications, Marine and Natural Resources recently announced a decision to create a big interconnection east-west from Ireland into the British 1,000 megawatt grid. I hope that will allow us to become serious exporters of renewable based electricity because it will give us a wider market.

Chairman

There have been blackouts in the US and Europe. Is there any danger of that happening on the island of Ireland?

Professor Convery

It is foolish to say "no" to such a question because the lights could go out as I speak. However, if we manage it properly, it is unlikely to happen. The big critique of our electricity policy is that it is supply driven. We are obsessed with getting more supply into the system. We have done little to incentivise conservation. If we incentivise conservation and keep incrementing the supply and if we go with this interconnector to the UK, from where we could get into the European system, we should not have any problem.

Deputy Sexton

I apologise for being late, although I did listen to some of the debate in my office. Where do we start when developing and discussing European policies at national level? The brief we received reinforces my belief that social services should not be last on the list. As a parent of young children and a future dependant, we should consider matters from a social services point of view. I represent a rural constituency. I am talking about the gamut of rural communities and their sustainability. As regards quality of life, independence is of primary importance to most older people. It will be difficult to encourage older people to live in clusters because it will remove them from their environment and they will not settle. Their dependants, who are usually their daughters, want to live beside them. That means the appropriate services must be provided. Economists do not start from that point when drawing up policies. Where do economists start when drawing up policies at national rather than at European level? I subscribe to the notion of sustainability across all services.

We received a brief about the EU's sustainability strategy. The Commission concludes that negative trends in the environment have not been reversed. Much has been done on this island, although there is more to do. However, we are more aware of the environment. How did the Commission reach that conclusion? The economies of the US, China and Japan are important. How does Ireland rate in terms of any measures it adopts relating to the environment and the Kyoto protocol? How do we rate with other such economies, which might only do a fraction of what we are doing, in terms of emissions and their effect on the global environment?

Many groups discuss rural Ireland. However, when a problem develops in the cities, particularly relating to waste management, instead of focusing on how they can deal with that, the discussion seems to turn to rural Ireland and how it is destroying the environment. Yet the cities want to dump their waste in rural Ireland rather than trying to find their own solutions. I hope those questions were not asked earlier.

Deputy Harkin

I agree with Deputy Sexton's comments about social services. The inference is that older people want to move into villages or towns, yet it is often the case that family members wish to live beside them so that they are not isolated or disconnected. There is a two way system. Although we have a different perspective on rural housing, I agree with Professor Convery that we need evidence based policy and choice. The assumption was made that because someone lives in a rural area there will be an increase in the cost of providing basic social services. That is not necessarily the case. The cost of providing infrastructure in urban areas, for example, can be greater than providing it in rural areas. We need evidence based policies.

It was stated that the figures do not matter. I agree that if we just build 5% of houses in the wrong place, it is a problem. If 45% of houses are built in suitable areas, that is a different situation. However, that is only one perspective. Certain organisations and individuals are trying to create the impression that the countryside is being overrun with houses. It is important to get the figures right in that context.

Mr. Coghlan

I will reply to Deputy Sexton's point about the Commission statement in its spring report for 2004 that the negative trends in the environment have not been reversed and that economic growth is still not sustainable. She wanted to know the basis for that in the Irish context. That is a broad assessment by the Commission for the EU as a whole in a document which does not go into great detail on the situation in individual member states, but looks at greenhouse gas emission or transport figures for the EU as a whole. The Deputy is right that much progress has been made in terms of environment policy in Ireland and many achievements have been secured. However, there are no grounds for complacency. While the EPA concluded in its last state of the environment report in 2000 - another one is due out this year - that the quality of Ireland's environment remained relatively good and compared favourably to that of other EU member states, nonetheless we must tackle significant issues and challenges, including the increased amount of waste generated and our compliance with the Kyoto protocol. There are measures and strategies in place and further ones are being developed to achieve that and to deal with the issue of natural resources. While we have a better base than other EU member states, we still have outstanding business.

Professor Convery

I thank the members for their good comments. The social side of things is worthy of more detailed analysis than I have given it or read about. I am aware that in the cities - it may be different in the country - family size has dropped dramatically. The education and mobility of the very small number of children who are now there has increased dramatically. The pattern that is certainly discernible in Dublin is that the number of children who are available to come back to look after older people is diminishing. We should support and indulge that model but the evidence shows that it will not be the primary long-term solution to the situation of older persons. That is the case when one looks at other countries that are ahead of us demographically in terms of the collapse in family size, as well as the increase in levels of income and education. We must think the matter through very carefully. I support Deputy Harkin's proposition that we need to examine it carefully because the choices for people's quality of life are pretty compelling.

As regards how we are doing, it is a mixed bag. The new countries are much better than we are concerning the quality of their natural environment. Our presumption is that they have serious air quality problems, which some of them do, but in terms of biodiversity they are strong. A big challenge for the European Union will be to hold on to that inheritance as they develop farming. I would put Ireland at the middle of the pack, if not lower, generally.

Finland has done amazing things. It has experienced rapid economic growth but it is the only country in the EU that has broken the link between GDP growth and transport/energy consumption. When one goes there one can see why - they take planning seriously and they know how to manage and use their infrastructure. I regret to say there are models around that are much better than ours, although some are worse. There are no grounds for complacency.

With specific regard to global warming, we have a huge mess. We have a massive overshoot and are now left with approximately five years to deal with it. It will take a significant effort to achieve that. It can be done but we have to get after it, using price signals to do so.

Deputy Sexton

I have a final question concerning the larger economies such as Japan, China and the US. Obviously they are taking measures of sorts but Professor Convery is saying that we have a certain number of years to get the global warming situation under control. How do we rate globally? I do not mean our performance. Supposing we took every possible measure, how would we contribute to the reduction in global warming by comparison with the other countries?

Professor Convery

That is an excellent question. The European Union, Japan, Canada and a number of other developed countries have opted into accepting a cap on their emissions. The US has opted out as a developed country, and China and India were never in. Therefore, Europe accounts for approximately 25% of total emissions - perhaps a bit more. Japan is responsible for about 15%. Obviously, therefore, if we do everything, and the rest of them do nothing and keep emitting, the problem will not be solved. The European strategy is to set up this trading scheme, get the Russians to buy into it because they can make money out of it from selling allowances, hope to bring the Chinese in and then hope that there will be a change of heart or Administration, or both, in the US that would bring it into this loop. I agree with the Deputy in that if we made a great effort it would not work, unless the other countries did so too. That is why we have to be strategic in giving ourselves the least costs. It is worth making the effort because if we do not we will have a lot of climate change and many people will suffer.

Deputy Sexton

While I subscribe fully to the notion, we must be careful about how it impacts on the social context of rural Ireland, whatever about the cities. If it is not going to make the enormous difference that is required by the world at large to subscribe to the same notions we have about global warming, we will still suffer in exactly the same way as they will in five years time, or however long it takes for there to be a catastrophe. Statements about global warming that emanate from certain bodies are sometimes accompanied by massive headlines in red ink saying, "Panic, it's all coming down around our ears, and it's your fault". In fact, however, we are trying our best but I would say we have to try harder. We need to continue to do our best and to continue to educate people about global warming. We must be careful of the notion of changing our whole way of life in order to contribute in a meaningful way, while not being able to make an impact in the way we should.

Professor Convery

We must remember that we must comply with the European context up to 2010 or 2012. Regardless of how sensible it is, that is what we have got. If we do not comply with that we will all have to pay substantially; we will have to buy allowances abroad, which will be costly. I agree that we have to do our best but so far we are not doing our best.

Chairman

I will now bring this part of the meeting to a conclusion. It has been a very interesting and informative discussion. I thank Mr. Coghlan and Professor Convery for their contributions, which have been very useful and helpful.

There are a couple of items of business, if members can remain here to discuss them. Under correspondence, the first letter is from the EU Committee of the Regions. I am advised that it is not appropriate to participate in this meeting until the COSAC discussions have been concluded. Accordingly, I propose to note the letter. Is that agreed? Agreed.

We have received correspondence from the Taoiseach who will attend the committee on 28 April to talk about the Lisbon agenda and the Spring Council in particular. Members should note that date for their diaries.

We have also received a letter from the Committee of European Affairs of Lithuania. We should invite the Tánaiste and Minister for Enterprise, Trade and Employment to attend the committee to discuss the issue of mobile labour in the EU. Is that agreed? Agreed.

We have received a letter from the Canadian chargé d'affaires, which is for noting.

We have also received correspondence from the British House of Lords, which relates to the future role of the European Court of Justice. It is proposed that the House of Lords could be asked to place this on the agenda for a future meeting of COSAC for discussion. Is that agreed? Agreed.

It is proposed to hold our next meeting on Thursday, 1 April 2004 at 2 p.m. It will be a brief meeting to consider the draft report on the Lisbon agenda, which members will have in advance.

The joint committee adjourned at 4.29 p.m. until 2 p.m. on Thursday, 1 April 2004.