This meeting has been convened to consider the motion referred to the select committee by order of the Dáil of 28 November on the approval of the terms of an agreement between Ireland and the European Bank for Reconstruction and Development on participation in the multilateral carbon credit fund, copies of which were laid before Dáil Éireann on 27 November. I welcome the Minister for the Environment, Heritage and Local Government, Deputy Roche, and his officials. I am conscious that the Minister must be in the Chamber for the debate on the Electoral (Amendment) 2006 Bill. I suggest we commence and then suspend the sitting once the Order of Business is under way. Is that agreed? Agreed.
Multilateral Carbon Credit Fund: Motion.
I am seeking the approval of the Dáil of the terms of the contribution agreement between Ireland and the European Bank for Reconstruction and Development in respect of Ireland's participation in a multilateral carbon credit fund. There are two separate tranches to Ireland's participation agreement, a contribution of €5 million to a project-based element and a contribution of €15 million for the green investment element of the fund. I will explain the two.
Ireland is committed to reducing its greenhouse gas emissions to 13% above 1990 levels on average in the period from 2008 to 2012. The Government has put in place a range of measures across all sectors of the economy to reduce emissions. I have set out in detail to the committee and the Dáil on previous occasions the nature of the measures we will take, which are also set out in Ireland's Pathway to Kyoto Compliance, which I published in July, copies of which are available in the Oireachtas Library.
Ireland was able to stabilise and reduce emissions from 27% above 1990 levels in 2001 to 23% in 2004. The key period will be between 2008 and 2012, the timeframe in which Kyoto Protocol compliance commitments will be assessed. Ireland will reduce its domestic greenhouse gas emissions by an average of 14.6 million tonnes under a number of schemes already identified, for example, through the use of the Kyoto Protocol flexible mechanisms to purchase allowances, a measure that has been implemented. The Government has capped the purchase of allowances at 3.6 million tonnes, or 18 million tonnes over the entire period. The total reduction necessary is 15.2 million tonnes. Since we have accounted for 14.6 million tonnes, the remaining gap of 0.6 million tonnes must be found from other measures. Further measures are being put in place, particularly on foot of the initial initiatives outlined in the Green Paper on Energy. I do not propose to consider these in any detail, but if members wish, I can spend some time on them.
The national allocation plan will be in the news later today. The figures which were published in March this year underpin separate Government decisions on the size of the burden to be taken on by firms in the emissions-trading scheme. The Government has decided that the emissions-trading sector will reduce emissions by 3 million tonnes per year during the period 2008 to 2010. These decisions underpinned the preparation of Ireland's national allocation plan for the period 2008 to 2012. I understand the Commission will issue its decisions today on whether it should approve a number of plans, including those of Ireland. I expect it will propose changes to a number of them. This will be consistent with recent statements made by members of the Commission, including Commissioner Dimas and President Barroso. The Commission is, understandably, keen to protect the integrity of the scheme against the potential for over-allocation in the light of the 2005 verified emission figures for industries involved in the scheme. It has been recognised that Ireland was one of the few member states that correctly allocated in 2005 and I expect the Commission will recognise the integrity of the approach followed by Ireland in assessing its second plan. Nonetheless, I expect the Commission's decision will not be the final word on the plan and envisage further engagement with it before the end of the year. Incidentally, one of the issues in which the Commission is interested is how we will buy carbon credits. I make the point especially because there has been wild commentary on the issue, to which we will come back.
I wish to consider in detail Ireland's commitment to use the Kyoto Protocol's flexible mechanism. Ireland will purchase a maximum of 18 million tonnes in allowances, or 3.6 million tonnes in each year of the commitment period. While this is not an insignificant amount in national terms, it represents a very small investment in a global context. Globally, the market for carbon allowances is growing exponentially, with over €3 billion already committed to the variety of public and private funds in existence. I expect the area to become one of significant interest. The Stern report placed considerable emphasis on the growth and development of the carbon credits fund and carbon trading. In Nairobi, Sir Nicholas Stern made special reference to the importance of robust carbon trading as the best economic method to deal with some Kyoto Protocol issues. The remarkable growth in the funds already in existence demonstrates the importance of the protocol's project mechanisms to the reduction of greenhouse gas emissions.
Ireland is a small player in the market. Many countries with Kyoto Protocol targets will purchase far more significant allowances than Ireland. According to information I have seen in other national allocation plans, EU member states alone are likely to purchase up to 500 million tonnes of allowances to meet their commitments. The contribution of the flexible mechanism to achieving the aims of the protocol completely contradicts the impression given by some Deputies and commentators that Ireland is buying its way out of its commitment and that purchases somehow break the spirit of the Kyoto Protocol. That is not the case. In fact, purchases are precisely what the protocol permits. Every sane observer in recent times has emphasised precisely this point.
Flexible mechanisms are not only important in facilitating the meeting of Kyoto Protocol targets, but are also of great significance for developing countries, which point has been missing entirely in the debate on the matter in Ireland, especially in the context of the use of modern, clean technologies. The transfer of technology and financial capacity to developing countries is one of the key and most positive aims of the mechanisms. No one who attended the recent UN conference in Nairobi could but have been struck by the fact that speaker after speaker, from the Secretary General to Sir Nicholas Stern, emphasised the importance of clean development mechanisms to the developing world, especially those countries at the lower end of the spectrum. This was evident at meetings of the parties to the protocol, at which the mechanisms were discussed frequently. The Nairobi framework announced by the Secretary General aims to use the expertise of the main UN development agencies to leverage greater funding for African countries, a goal I support.
In Nairobi, Sir Nicholas Stern repeated the key messages of his recent acclaimed report which concluded that the use of carbon credit funds to accelerate action in developing countries was an urgent priority for international co-operation to combat climate change. Such investment helps not only to reduce global greenhouse gas emissions but also contributes to sustainable development priorities of project host countries. For Africa, it is crucial to ensure climate change does not endanger ambitious projects to alleviate poverty through the millennium development goals. The point made by Sir Nicholas Stern and many others is that the issue of global emissions is a global one. If one takes one tonne of carbon out of the atmosphere in Ballyfermot, it is just as valuable as removing it from the atmosphere on the other side of the globe. If one can prevent one tonne of carbon being released into the atmosphere in a developing country, while helping that country, it has a double benefit.
The agreement I propose to sign with the European Bank for Reconstruction and Development, subject to the approval of the Dail, involves investing €20 million of Irish money in the new multilateral carbon credit fund offered by the bank in conjunction with the European Investment Bank. The bank will use its expertise in project investment in eastern Europe and prior experience with carbon fund management to secure contracts for projects to reduce emissions verifiably in return for emissions reduction credits. These projects will be fully validated and accredited by the United Nations supervisory bodies. The credits will only be issued for verified emissions reductions.
There are two distinct elements to the fund. The first is the project-based element, in which I propose to invest €5 million in respect of projects eligible under either the Kyoto Protocol joint implementation mechanism or the clean development mechanisms. This element of the fund will be used in other countries and can also be used by private members such as firms in the EU emissions-trading systems to buy credits for compliance. The second window, which will take the larger amount of the investment, is reserved for sovereign parties to the protocol. This is the green carbon fund window, which will allow countries to sell Kyoto Protocol allowances to other countries in return for investment from the fund. Ireland will commit €15 million to this part of the fund. Allowances can only be exchanged for verifiable emissions reductions. As such, while this window also envisages investment in emissions reduction projects, it uses the international emissions-trading mechanism provided for in the Kyoto Protocol rather than the project mechanisms. Ireland's investment is ring-fenced for emissions reduction projects and cannot be used by selling countries for other purposes. This is an important point, given the level of debate on the quality of some purchases. Ireland's investment will be specifically ring-fenced for emissions projects.
The total number of credits that Ireland can expect from the investment in some respects depends on the types of projects that become available through the fund. While the banks envisage a price of between €5 and €10, this amount may change as the carbon market develops — a point made by Stern. This is why it is important to secure early investment in projects through funds such as the one outlined. With this price range, when fees are taken into account, Ireland's investment could yield up to 3.5 million allowances, although I expect the final account will be lower, having regard to likely future price movements. There will be price movements in the fund.
The contribution agreement is fully in line with Government policy to reduce greenhouse gas emissions as cost-effectively as possible. It gives Ireland access to the breadth and depth of experience of both banks, reduces the risk for Ireland by avoiding direct investment in projects and ensures Ireland gets good value for money. Also, it allows us to concentrate our efforts on reducing emissions in Ireland.
The management of Ireland's participation in the fund will be undertaken on an ongoing basis by the National Treasury Management Agency, NTMA. The initial negotiations between the bank and the Government have been led by officials from the Department of the Environment, Heritage and Local Government, as the NTMA is not, as yet, in a position to commence its activities. This will be possible following enactment of the carbon funds Bill, which is currently being drafted. I expect to be in a position to publish it in the near future. The NTMA will then take over management of the fund. It will also be tasked with identifying and contracting investment in other funds offered by these and other multilateral banks, private funds and over-the-counter trading allowances. I do not envisage its getting involved in direct project investment, given the specific expertise available to it and the relatively small number of allowances Ireland will need to buy.
I thank the committee for its time.
I thank the Minister for his presentation.
I thank the Minister for bringing the motion before the select committee. However, the Labour Party will be opposing it. The draft report circulated by the Minister states, in the third paragraph: "following the debate the select committee agreed to report back to Dáil Éireann to the effect that it had completed its consideration of the motion". I propose that the following words be added after "motion", "and had rejected the proposed motion". I am proposing that the committee reject the motion.
The approach taken by this Government in dealing with climate change, carbon emissions and our commitments under the Kyoto Protocol is essentially a policy of polluting now and paying later. We are required to reduce carbon emissions to 13% above 1990 levels by 2012 under the Kyoto Agreement. The Minister stated we were at 24% in 2004 and recent reports, including one from the European Environment Agency, EEA, suggest we may now be at a level as high as 29% above the 1990 level.
Whether the level is at 24%, 29% or in between, this country is producing greenhouse gases far above the level permitted under the Kyoto Agreement. With five years to go to the Kyoto deadline in 2012, I see no policies or commitment from the Government to reduce the volume of carbon and greenhouse gases being emitted. I see a policy being pursued aimed at buying our way out of the problem, which is happening in two ways. The first is through the emissions-trading mechanism, on which the European Commission will have a number of things to say today. We will wait to hear what is said, but it is a scheme in serious trouble, as the Minister knows.
The European Commission has recognised that fact, and the way in which the national allocation plans of a number of countries were structured has not allowed the price of carbon to reach the level anticipated. We now have an issue as to whether the emissions-trading regime will be effective. As I understand it, the European Commission is reconsidering the package. We have a long way to go yet.
Second, the Government seems to be taking the approach of buying credits and allowances, and if it the limits put down by the Kyoto Protocol are breached at the end of the exercise, we will pay the penalties. That is an environmentally irresponsible and internationally unjust policy on the part of the Government, although it is unannounced. In this country we think that because we are well off we can continue to pollute, effectively buying up the pollution allowances of poorer people.
That is rubbish.
It is not rubbish. One quarter of the population of the world——
It is absolute rubbish. Sir Nicholas Stern, Kofi Annan, Proinsias De Rossa, Stavros Dimas and Al Gore would disagree with the Deputy. I will give details to the Deputy.
How many of those people agree with Ireland being at the level we are over our Kyoto limits?
I will deal with that, but the Commission is specifically asking us to show faith on this issue.
A quarter of the world's population——.
The Deputy is wrong and false. What he is saying is completely untruthful.
The Minister should listen. A quarter of the world's population does not have electricity.
That is true.
They cannot pollute.
That is true.
The Minister's proposal is for them to stay poor and us to pollute.
That is utterly false. Kofi Annan would completely and utterly disagree with the Deputy.
We will pollute for those people, and that is what this regime is about.
That is absolute rubbish.
It is a form of environmental imperialism.
That is absolute balderdash.
It is unjust, unfair, it perpetuates poverty and it does not deal with the core issue. The only environmentally responsible way of dealing with global warming, and carbon and greenhouse gas emissions is to reduce their levels, not to pay so we can continue to pollute in this country at the expense of poorer people in other parts of the world. The motion concerns the first of a series of similar proposals that will be presented to Dáil Éireann to give effect to the Government's "pollute now, pay later" policy on carbon emissions. Ireland is a wealthy country, yet this is our contribution to the solution to the global problem of global warming. We are using our wealth to buy our way out of the problem rather than facing up to our responsibility to lower emissions. The more we buy our way out of the problem, the less pressure there will be to lower emissions and deal with issues such as public transport, planning and development and alternative energy sources, regarding which we need to take effective action so as to make a responsible contribution to addressing global warming. The Labour Party will not be a party to the "pollute now, pay later policy" being pursued by the Government. I am opposing the motion.
I agree with the sentiments expressed by my colleague. The Government has been caught on the hop on this matter. It is almost unprecedented to receive briefing notes the night before and supplementary notes on the morning of a meeting. This is a complex issue and throwing paper at members at the last minute is not a good way to do business.
I do not know what the Deputy is talking about.
I am not familiar with any briefing notes.
It seems we are moving very quickly.
To clarify, given that people will be listening to the Deputy, I did not give him anything at the last minute.
I do not wish——
The Deputy should not make an accusation without stating whom he is accusing.
This meeting was not scheduled far in advance. It should have been flagged much earlier by the Minister, given that it concerns an issue of such importance.
It was scheduled last week. I did not issue any documentation at the last minute. The Deputy is uttering falsehoods.
There should have been more than a week's lead-in period to a very significant issue.
That may be so but I will not allow the Deputy to utter the falsehood that this meeting was imposed on him at the last minute. If he does not do his work, that is his business. The reality is that the subject is very serious but that Ireland has a window of opportunity not only to meet its Kyoto Protocol requirements but also to take specific steps.
I would be interested to know when the Minister's office gave the briefing material to us. It may be a matter for another day.
I will take up the substantive issue. The Minister is at great pains to say the buy-out is allowed and a fine way of meeting our obligations. My difficulty is that there is no equivalence between one tonne of carbon in Ballyfermot and one tonne in Bhutan. The difference is that we pay for the tonne in Bhutan, while we do not if we make the reductions at home. That is my difficulty.
Of course, we must pay if we make the reductions at home.
I suggest we should be getting our own house in order rather than buying our way out of the problem.
The Deputy does not understand the Kyoto Protocol.
This is the Borat buy-out. By investing in Kazakhstan and other countries, we are simply buying our way out of the problem rather than putting our own house in order.
The Deputy is suggesting we close down Irish industry; he is in the Mary White school of economics.
The economists agree that reducing our emissions at home helps our competitiveness.
I agree.
The allowances will be such that the sum involved in the electronic voting fiasco will look like pocket money by comparison. The Minister is suggesting we buy 18 million tonnes of allowances in the 2008 to 2012 period. A trade price limit of approximately €10 per tonne, a figure which may increase substantially, results in a very substantial initial purchase price of €180 million. For seven years I have been stating we would be much better off improving matters at home. Economic growth and carbon emissions are not linked and if the will is there, the Minister can disconnect them. He can invest in renewables and improve public transport and the building regulations but Ireland is falling behind. The UK building regulations are streets ahead of ours. Buildings here do not measure up to those in the rest of Europe.
On public transport, the Minister seems to be obsessed with building motorways, as though oil will continue for ever. All we ask is that he put at least as much money into public transport as he does into motorways. However, during the past ten years he put four times as much into roads as he did into public transport. That is where the problem lies. The Minister should commit himself to reducing our emissions by investing in public transport and wind-energy projects. Some 20,000 people are employed in Denmark in the renewable energy sector. We would be hard pushed to find 1,000 people so employed in this country.
We have options, of which I accept that investing in reducing emissions in developing countries is one. However, the best option is to reduce emissions here. That is a clear political decision.
That is what we are doing by majority.
Choosing the route taken by the Minister will cost the taxpayer almost €200 million between 2008 and 2012.
It is a reduction from the sum of €1 billion mentioned by the Deputy.
The Minister knows as well as I do that the price of carbon credits increases and decreases. If the Commissioner has his way, we will tighten the regime and the price may increase substantially.
I wish to ask the Minister a couple of specific questions but I may not be here for his replies. Will there be joined-up thinking on the relationship between potential purchases and the Irish aid programme? Will we simply lash out money to deal with our commitments rather than ensuring there is a connection? I do not suggest we include it as our aid contribution. However, we should ensure that if we buy credits abroad, we do not constrict the Irish aid programme. As far as I can see, the programme does not have much of a sustainability component. However, that is another day's work.
I share the Deputy's view and made the point during my contribution at Nairobi. I wish to state this now because I know the Deputy must leave. It will not happen in the case of the EBRD fund because it is specific to Europe but will in the future.
The other specific issue is whether the reductions would have happened anyway. We all saw——
I know the Deputy is concerned about time and the issue of hot air. These are specific project-related funds which will be ring-fenced. We made this clear in the context of the EBRD. The Deputy is correct. The European Union recognises that there is a danger, whereby one could get what is termed "hot air" where the economy of a country has collapsed.
I am worried this will cost the country dearly. The better option would have been to implement reductions here. It is not too late to do so but it would require a massive change of direction on the part of the Government and I am not hopeful it will occur.
I can give specific answers on all of the points made.
Does Deputy McCormack wish to speak now, or does he wish to hear the Minister?
I apologise. I must leave but will return as soon as I can.
We must recognise that the Government has a serious problem. This side of the House would like to help the Minister solve the problem but the proposed measure will not do so. I suggest we postpone making a decision, if that is possible at this late stage, as this serious question needs further debate. It is obvious that we must improve conditions and reduce our emissions in Ireland. The task of this committee is to advise the Minister and work with him to see how this can be achieved. I do not think he will get agreement on the proposal made in the motion. Can the making of a decision be postponed until we analyse the matter further and see if we can come to a better solution than the one proposed?
We have a window of opportunity, which the Commission is anxious that we use, to buy €20 million worth of carbon credits at a fraction of the price postulated some months ago by Deputies Gilmore and Cuffe. It would be foolhardy in the extreme to lose that opportunity, as to do so would have a negative impact on the manner in which the Commission is considering the national allocations proposal. It would be detrimental in the long term.
Deputy McCormack asks what we are doing. That is a right and proper question. Carbon trading is part and parcel of the Kyoto Protocol programme and if one agrees with the protocol, one agrees with it. It is regarded by the best observers such as Sir Nicholas Stern and Kofi Annan as a particularly positive mechanism. The Commission has signed up to it and wants to see member states putting money on the table. It would be very foolish to miss this window of opportunity, to which we would have to come back in the second part of our discussions on NAP 2, the national allocation programme, with the Commission. I am grateful to the Deputy for raising this point and allowing me to make this long intervention. I do not wish to be difficult but it would be unwise and costly to move in the direction he proposes.
I thank the Minister for that clarification. How wide is this window of opportunity? The small window of opportunity for the correction of the electoral register was extended. I know that was a different problem but windows of opportunity can be extended.
No, they cannot. The time runs out on Friday.
Mr. McCormack
In that case a gun is being held to our head. That is not the right way to solve the problem. This question deserves a more wide-ranging debate than we are having this morning between the Minister and four Deputies. We should demand such a debate, as not everyone will accept that the Minister's proposal is the solution to the problem. I do not care about the window of opportunity. This is a serious matter which should be debated by the full committee and even by the Dáil. It is too serious to be rubber-stamped.
Like Deputy Cuffe, I wonder if there is a connection between this matter and the issue of overseas aid. Will one affect the other? I appeal to the Minister to stand back from short-term considerations and debate the matter fully in the House.
I do not understand the point made by Deputy Gilmore. His claims regarding the European Commission's views on carbon credits are either mistaken or false. The Commission is specifically asking member states, the national allocation programmes of which are before it, to make clear what they are doing. One of the issues with which it is concerned is that member states have not put in place the legislative mechanisms which would allow the purchase of credits. We are in the process of doing this and the carbon credit Bill is being brought forward. The Commission will be anxious to see such legislation on the statute books of member states sooner rather than later.
With regard to Deputy Gilmore's assertion that the European Environment Agency has stated emissions in Ireland are 29% above 1990 levels, that is simply false. It is not true but I will not get involved in a debate on——
Is the Minister stating it is not true that it stated it, or that the percentage figure is not accurate?
It is not true that it stated it.
It was reported.
It may have been reported but as a practising politician the Deputy should be very careful to remember that one should not believe everything one reads.
To clear up the issue, will the Minister tell us at what percentage level we are now?
The figure is now 23%. However, by 2012 we must reduce emissions to 13% above 1990 levels. As the Deputy rightly states, it will be challenging but I have never said otherwise. The 29% figure probably refers to the level of emissions above the 1990 baseline figure that applied in 2002. I do not mean that the Deputy is trying to mislead the select committee but those are the facts. The Deputy's assertion that purchasing credits is a violation of the spirit of the Kyoto Protocol is wrong, as it is provided for specifically in the agreement.
On the more important point raised by Deputies Gilmore and Cuffe that we attenuate our carbon emission levels, let me inform them that we are cutting our levels. Based on the business figures for 1990, the projections for the years 2008 to 2012 would have been that the figure would have stood at 78.2 million tonnes. Ireland's Kyoto Protocol target is to reduce emissions to 63 million tonnes, which means a 15.2 million tonne cut to achieve the target. We have already achieved an emissions reduction of 8 million tonnes under existing policies and a further 3 million tonnes are being cut by the companies involved in the trading scheme. We have stated on a number of occasions that we would buy 3.6 million tonnes on average over the period. This figure was set by the Government some time back and has been announced time and again. We will have reduced emissions by 14.6 million tonnes, leaving Ireland 0.6 million tonnes short of the target. We have outlined in the Green Paper a number of programmes to deal with this figure. It would be unfair for me to flood the select committee with data but I will refer to a couple of examples.
From where does the figure of 11 million tonnes come? Renewable energy support schemes which facilitate the connection of renewable energy to the national grid will significantly decrease our target. In fact, by setting a target to generate 13.2% of electricity supplies using renewable sources by 2010, we will cut emissions by 1.3 million tonnes. One can cut emissions and save energy, for example, by ensuring pipelines do not leak. The 109 companies with the highest levels of emissions have set a target to cut emissions by 3 million tonnes. I believe they will achieve that target.
The Common Agricultural Policy is often overlooked when considering carbon emissions. We have a very large herd, which produces a significant amount of methane gas that has an impact 20 times greater per tonne than carbon. The agreed nitrates action programme in respect of which we have the derogation agreed will take 2.4 million tonnes per annum from the system. Carbon emissions in excess of 2 million tonnes will be attenuated by forestry. As part of the partnership agreement, there are further inducements for that sector.
In regard to the building regulations, the arrangements I have targeted will save 300,000 tonnes. They are not the silver bullet Deputy Cuffe suggested but he is right that significant changes will be made. Significant changes will arise from Transport 21, notwithstanding the fact that the Deputy would prefer if none of the money were spent on roads. Frankly, I do not think that is an economically tenable argument but the move will produce significant reductions.
Another measure which has produced remarkable savings is the capturing of methane from landfill sites, as well as moving away from such sites. Methane is one of the most polluting substances. We would reduce our emissions by 700,000 tonnes if we were to move further away from landfill, which for me is very much a personal objective.
There are other programmes in line, such the bioheat programme, which we have not calculated into this tonnage. If we move to wood-chip or wood-pellet heating systems, a very successful policy which is being rolled out at the moment under the SEA, it will cut carbon emissions by 160,000 tonnes. Further reductions of 300,000 tonnes will be achieved by moving to co-generation in the context of electricity. I realise it is difficult for the committee to take all that in. I make that point as an illustration. I could make many more points. To put it mildly, it is false to suggest that nothing is being done in Ireland.
Deputy Cuffe suggested that the best way to deal with our responsibilities under the Kyoto Protocol is at home. He said we should disconnect economic growth from emissions. I agree with him. The Irish economy has grown by 150% since 1990. We are currently at 23.33% of the 1990 level. We have been remarkably successful in disconnecting economic growth from greenhouse gas emissions. We are the exemplars of precisely what the Stern report recommended. Continuously lashing ourselves in the belief that we are the worst in the world is false. We have made a great deal of progress. We still have much to do and it cannot be denied that it will be very challenging.
Deputy Cuffe also said we should take a leaf out of Denmark's book. It is a pity I did not have the opportunity to reply to the Deputy while he was here. If we did what he said we would be in trouble with the European Commission because Denmark has not got its final NAP II agreement before Brussels, whereas Ireland has and it was one of the first countries to do so.
I have been in discussion with the Commission. The Commission will have issues about which we will hear later today. We do not know what today's press conference will produce.
I have it here.
Where? Is it in The Irish Times?
No.
It is 12 noon European time, so it is coming out about now. The Commission will be requesting the bulk of the member states to review their NAP proposals. One of the things it is asking Ireland to do is precisely what is before this House today, namely, to put money on the table and show form in the purchase of carbon credits.
Deputy McCormack asked a very logical and structured question. He asked if this decision could be put back. A window of opportunity has presented itself in the EBRD. It is a very beneficial opportunity for Ireland to buy carbon credits at a fraction of the cost we were discussing only a few months ago. There is double virtue in that the purchase of the credits will be in schemes that are specifically related to projects in the emerging economies in eastern Europe. The second part of Deputy McCormack's question was whether this could somehow tie in to aid. The answer is "No" in respect of this batch, but my view is that it could be done in the future. There is a double virtue in assisting developing countries in going into clean energy production, particularly the poorer countries that have difficulties with energy. That is a matter for the future.
We have been signalling the purchase of the allowances for some months. There has been an ongoing debate on the issue. I am not sure how many times I have mentioned the figures but the total purchase figure of 18 million tonnes over the entire period — the allocation figure for the specific amount that would have to be allocated for purchase in any other period — has been signalled for more than 12 months.
I have just received the statement from the European Commission, which it issued at 11 a.m. The Minister will have to redo all of the figures involved, as the Commission has reduced the amount which will be allowed under the emissions-trading scheme from 22.6 million tonnes, which was the proposed cap, to 21.15 million tonnes. The Minister will have to find 1.5 million tonnes some other way.
The Commission's initial response to the NAP II proposals which have gone forward from member states is not its final response. This is precisely the position we were in with the original national allocation programme two years ago, which required a period of negotiation. There will also be a period of negotiation in this case. One of the things the Commission is anxious to seek is——
This is a decision. Commissioner Dimas used the words "today's decisions".
I spoke to Commissioner Dimas yesterday.
I have it here in writing, hot off the presses.
I do not care what the Deputy has in writing. I spoke to the man yesterday. The process is that we have an initial response to the national allocation programmes which have been put forward by member states. The programmes must be finalised and will revert to member states, which must then respond to the views of the Commission. One of the matters on which Ireland must respond is that we have not yet put in place a purchase mechanism. Ironically, what we are doing today is establishing just such a mechanism. We are meeting a specific requirement of the Commission today in an environmentally progressive manner which is also progressive for the emerging economies which will benefit.
We will ring-fence the fund in question and buy through the European Bank for Reconstruction and Development, which Deputy Gilmore mentioned. Ireland is a member of both banks involved. It is not as if something has been sprung on us. It is well within the Kyoto norms. Other member states are not anywhere near as far along as Ireland, including the member state suggested by Deputy Cuffe as the exemplar. That state has not even submitted its programme.
The Order of Business is under way in the House. I wish to clarify the position on Deputy Gilmore's amendment. In accordance with Standing Orders, the motion before the select committee is here for consideration only. Standing Orders do not allow for an amendment to such a motion, which means it is the sole function of the select committee to debate the motion itself. The procedure is similar to the procedure on the Estimates.
Will we have the opportunity to divide on the motion in the Dáil tomorrow?
Yes.
In that case I will address the matter in the Dáil tomorrow.
Do members wish to suspend for the Order of Business?
We are in the Chairman's hands. I wish to make just one or two observations. I have noted the Minister's remarks about the current state of our emissions, which is a subject to which we will return when there is independent verification of his figures. Even if one accepts the Minister's figure of a required reduction of 15.2 million tonnes, today's decision by the Commission means that far less than the proposed 3 million tonnes will be allowable under the emissions-trading scheme. Therefore, Ireland will face a greater requirement to reduce emissions.
Sorry, Deputy.
The Minister has interrupted me enough.
I wish to be helpful.
I have had all the help I want from the Minister this morning. Some 3.6 million tonnes of allowances per year will increase to 18 million tonnes between now and 2012. Taking the lowest price, based on current carbon credit prices, this will cost the taxpayer €180 million.
That is far short of the €1 billion predicted by the Deputy.
If, as a result of today's Commission decision to make changes in the emissions trading regime, the price of carbon credits increases — the purpose of the Commission is to increase the price in order that the scheme will be more effective — the cost to the taxpayer will be more than €180 million. If the price increases to the upper limit——
The fund will not increase.
If it increases to the upper limit of €30 per tonne, the level at which the Commission wishes the price to be, the policy being pursued by the Minister will cost the taxpayer €500 million between now and 2012. He is asking the——
The Deputy's argument is baseless.
Let us take this slowly.
The Deputy previously said it would cost €1 billion. He is now saying it will cost €500 million.
Some 18 million tonnes at €30 a tonne——
Who used the figure of €30 a tonne?
If the price increases to €30 a tonne——
The Deputy is using the word "If". Would it not be prudent to use the sum of €20 million to buy credits at a lower price today?
I am talking about the overall picture.
Would it not be wise to buy them today?
We are back to the Moore Street of greenhouse gas emissions. The Government's position is based on finance, not——
The Deputy would prefer to buy at €30 a tonne rather than buy now. That is mad economics.
I do not want to spend anything. I want Ireland to reduce its emissions to ensure taxpayers are not presented with a big bill and left to suffer the consequences of the actions of the Government long after it has left office.
How do we do that? Do we close down every industry in the country?
No.
That is precisely what the Deputy wants to do.
That is what would be required. The Deputy is in the same economic league as the whites of the Green Party who want to slow down economic growth.
Let us follow the logic applied. Some 500,000 dwellings have been built during the past ten years. The Minister has delayed introducing and implementing the energy labelling of buildings regulations.
They will take effect in January.
They should have been introduced, at the latest, at the beginning of this year but the Minister sought and obtained a three-year derogation. If he were really serious about reducing carbon emissions, he would not have allowed, on his watch or that of his predecessor, 500,000 buildings to be built without first putting in place the required energy labelling regime.
If the Deputy were really serious——
As there is a vote in the Dáil, I propose that we suspend the sitting until 2.30 p.m.
Sitting suspended at 11.30 a.m. and resumed at 2.30 p.m.
We can resume our deliberations on the motion. Had the Minister concluded?
I will offer.
I will yield the floor.
I believe Ireland's national plan was approved this morning, but the cap on Ireland's emissions has been reduced by the significant amount of 1 million tonnes. Will the Minister comment on the effect of the changes to our national plan on the document being discussed today?
I am pleased the Commission was very positive about our plan, and as I mentioned this morning, a number of issues were of concern to it. Ironically, an issue of concern was our arrangement for purchasing credits, and the Commission specifically wants this process completed.
The decision today is only the end of the first stage. We went through this process on the last occasion also. It was a question of providing additional information and arguing one's case with the Commission. The emphasis the Commission is placing on substantiating Ireland's plan to purchase carbon credits is of significance because it is directly relevant to today's business. My officials and I were talking to Commission representatives yesterday to assure them we would be buying credits but, until such time as they see the legislation and know how much money we have on the table, they will not be assured on the matter. Therefore, the process in train today is important.
The Commission's decision today is not the final one. The wording makes it clear that member states can come back and make specific reference to it. It states that any other amendments of the national allocation plan, apart from those made to comply with Article 2 of the decision, must be notified by the deadline of 31 December, referred to in Article 11.2 of the directive, and require prior exceptions by the Commission pursuant to Article 9.3. Between now and that date, I will obviously be submitting the legislation and the agreement of the Dáil to purchase carbon credits.
Can the new cap of 21.15 million tonnes of carbon dioxide be changed?
Yes. The Commission accepts that we will pass the carbon credits Bill and that we have already made an allocation within the Estimates. However, it wants to see hard proposals. Other member states have made proposals to produce the necessary legislation but have not always produced it. A number, including Denmark, are already subject to proceedings by the Commission because they have failed to produce their national allocation plans.
To what level does the Minister envisage the cap being moved?
We will be moving as close as possible to the figures outlined.
What will the position be if we and the other nine parties subject to this decision do so?
Let us be fair to the other nine. The negative aspect of the UK decision, for example, is largely technical. It refers only to Gibraltar. Other member states must put their mechanisms in place, as we have. This is precisely the point the Commission was making. It has no doubt that we will enact our carbon credits Bill but it is anxious to achieve the same commitment from other member states. I am not in a position to state which ones. In the past other member states promised legislative change without enacting it but when we promised it, we made that change.
If the level is not increased, the Minister will have to secure reductions of the order of 1.5 million tonnes.
No. That is not true. If we do not achieve the increase, the trading sector will——
No, because the cap is on that sector.
I was trying to make a point on this matter but the Deputy said he had received sufficient clarification. There is a misunderstanding in this regard. The adjustment in question will concern the trading sector.
That is right; that is the point I am making.
Then we are making the same point.
The cap is an upper limit on the amount allowed in the ETS.
It is an upper limit on the amount that will be allowed in the ETS but it has not been finalised.
If the limit stands, the reduction in the ETS limit will have to be picked up by way of reductions in emissions. Is that correct?
I am not anticipating that it will stand. As I stated, the Commission——
I said "If". If the limit stands at 21.15 million tonnes of carbon dioxide, it will follow that additional reductions of almost 1.5 million tonnes will have to be achieved.
Only if we do not buy credits. The point I made, which has been missed, is if we——
This brings us back to the same point — the Minister's solution is to buy.
It does not.
It is more expensive.
It is not; I reject that absolutely. If one reads the Commission's website, where this issue is discussed, one will see it is up to each member state to decide on the most economically advantageous way of meeting its Kyoto Protocol targets. Buying credits is not necessarily a more expensive way. As Deputy Cregan pointed out this morning, closing industry is the most difficult way by far. Putting onerous responsibilities on industry, the cost of which will be passed on to consumers, is more expensive. If further impositions were placed on the companies involved in the ETS scheme or the electricity supply industry, prices would increase in the short to medium term.
It is the Minister's policy to increase prices.
The Deputy cannot have it both ways. He advocates——
It is the Minister's policy to increase prices to fatten up the ESB for privatisation.
That is not the issue under discussion. With all due respect, the Deputy cannot have it both ways. He cannot advocate that we impose a further penalty on industry, as he did throughout the morning, and then——
I never argued for that.
The Deputy most decidedly did.
I argued for carbon-producing industries——
This is meant to be a dialogue where one listens, as well as asks questions. To answer the Deputy's specific question. The Commission is particularly——
And one where the Minister does not distort what I stated.
I make the point that placing this imposition on industry would have two effects. It would damage industry and jobs and, in the case of the electricity industry, costs would be increased. It is pointless to suggest there is a way to avoid this. The alternative, precisely the method allowed by the Kyoto agreement, is that any state party to it can buy carbon credits. The point made in the Stern report and his presentation at Nairobi was that if it was economically prudent to buy credits, it was a better way to go than damaging industry. The limit could be achieved simply by pushing the entire cost onto industries. However, the most cost-effective way of meeting the Kyoto Protocol targets may not always be domestic reductions. That is recognised and the fundamental point of the mechanism and the Stern report. It may be more prudent to buy credits than simply place impositions on industry. That is not to state one sidesteps all of one's responsibilities; it is quite the opposite. One must have a mix of the two.
I am delighted with the decision made today on the allowance of 21.5 million tonnes. It is a positive decision.
No, the Minister is not.
I am delighted because it is a positive decision. I ask the Deputy not to tell me how I feel. I am also delighted because the two issues referenced in the decision which will have an impact are ones with which we can deal quite easily. The most important issue is that of the purchase of credits. The European Commission wants to see a substantiating of Ireland's plan to purchase carbon credits.
Another flaw in Deputy Gilmore's argument is where he stated the Commission wished to increase the price of carbon credits to €30 per tonne. That is not true. Even if it were, it would make sense to buy tomorrow or the day after tomorrow at a price significantly lower than this. It would make no sense to wait until the price increased before buying. It would be prudent to buy now when the price is low.
I wish to respond to the Minister's monologue. I said this morning that the Government's approach to the Kyoto Protocol and our requirement to reduce carbon emissions and make a contribution to solving the problem of global warming is to buy its way out of the problem using the emissions-trading mechanism to purchase credits and allowances. The Minister has confirmed that to the committee.
If the Deputy says tomorrow is Christmas Day, that does not make it Christmas Day.
The Minister should allow me to respond without constant interruption.
The Deputy should not attribute to me things I did not say.
The record will speak for itself. Allow Deputy Gilmore to continue without interruption.
I am only replying in kind. The Minister did a fair bit of reinterpretation of what I said earlier.
As long as we all know where we are.
This is political debate. The point I want to make is about the Commission's position on what the purchase of allowances will cost. Today's decision by the Commission, which the Minister states can be renegotiated, is that there will be a new cap of 21.15 million tonnes on our allowance of CO2 emissions. The Minister proposed a cap of 22.6 million tonnes. This was not accepted by the Commission. Last year we achieved 22.4 million tonnes. No matter which way we look at it, the cap which has been decided by the Commission today is considerably lower than what the Minister proposed or what was achieved last year. If the Minister does not succeed in having that cap lifted, that additional 1.5 million tonnes will have to be addressed by way of reductions. The long list of figures the Minister gave us this morning in regard to where reductions might be achieved — and much of what he said was aspirational — will have to be revisited.
Today's decision by the Commission was made on the basis that it wants to drive up the price of carbon. I refer the Minister to the text of the statement made by the Commission. It states that the purpose of the decision is to create the necessary scarcity in the European carbon market. The logic of the Commission's position is that driving up the price of carbon will create an incentive to reduce emissions. The Minister says we have to buy 18 million tonnes by way of allowances over the lifetime of the agreement. At the current price of €10 per tonne that will cost €180 million.
The Commission wants to drive up the price to approximately €30 per tonne. Should that happen, the cost will be approximately €500 million over the lifetime of the agreement, between now and 2012. The Minister may shake his head all he likes but what we are talking about is the taxpayers of this country paying up to €500 million for carbon allowances and carbon credits so that we can continue to pollute by way of transport, industry, agriculture, a lack of proper energy conservation measures in buildings and all of the various options, many of which are open to us as a method of reducing our carbon emissions. This gets complicated when one gets into the business of trading emissions. However, it is very simple; we either reduce our carbon emissions or we pay. Part of the payment may be made by industry through the emissions-trading system but the scope for that is being reduced by the Commission, for very good reason. As a result, taxpayers will end up picking up the net bill for the failure to reduce carbon emissions. It has not happened yet and the only——
Can I answer that?
The Minister is going to answer it anyway. I do not know why he is asking my permission.
It may have been a misstatement, but the Government does not buy under ETS, companies do. Accuracy is important in these matters.
The Government simply hands out all the allowances for free.
On the issue of price, I will read what the Commission's website said half an hour ago. It states:
What determines the price of allowances?
The Commission has no view on what the price of allowances should be. The price is a function of supply and demand as in any other free market. Market intermediaries quote prices for allowances offered or bid for.
The conclusion Deputy Gilmore has reached, that the Commission wishes to drive the price up as a matter of course, is a false one. If that were to happen, and nothing else, and we did not buy carbon credits or meet our targets, we could face a penalty. Even if all that were true, however, would it not be more logical to buy the €20 million of credits between now and next Friday at a price which is at most a third of the price Deputy Gilmore hypothesises? I note that Deputy Gilmore has revised his prediction of the cost downwards. He was speaking in terms of €1 billion not long ago.
I never said that.
As Deputy Gilmore would say himself, it is all political debate.
I said €200 million.
We must deal with the figures before us. We have the opportunity to make a decision in this committee and the Dáil to buy €20 million of credits in a beneficial scheme which will actually help countries with emerging economies. The money will be earmarked specifically for use in programmes which will reduce global carbon emissions. Furthermore, the scheme will meet all of the criteria set out in Kyoto, which were recently praised by the UN Secretary General, as well as the criteria which have been supported by Sir Nicholas Stern. More to the point, the scheme meets these criteria at a price which is less than a third of the price Deputy Gilmore suggests. It appears to be a real no-brainer, to use common parlance. We should buy the credits.
The problem is that carbon credits are not pork bellies, despite the best efforts of The Economist and others to classify them as commodities which can be traded. We wish to reduce the amount of carbon emitted. When addressing the three principal options for Ireland of reducing our emissions, buying carbon credits or reducing emissions elsewhere, the Minister adopted until recently a neutral view as to which approach was best. If one’s petrol tank is leaking, one can call in at a filling station more often or fix the leak. Ireland must fix the leak. We need to reduce our own emissions and I do not believe it will have a negative impact on our economic performance if we do. The Minister uses the example of Aughinish Alumina, which is a worst-case scenario. A rosier picture can be painted.
We build 90,000 housing units a year, each of which uses perhaps eight tonnes of carbon a year. The Minister could change the building regulations tomorrow to improve the energy performance of those housing units significantly. He could save two tonnes of carbon a year on each housing unit. Over the next five years, we would make an annual saving of approximately 1 million tonnes. I do not believe this would have a negative impact on the marketplace in Ireland. It would, in fact, ensure people had warmer homes that were cheaper to heat. The Minister should be prioritising measures such as renewable energy. The small percentage of energy we obtain from wind could be multiplied by a factor of ten in a fairly short period. Denmark employs 20,000 people in the wind-energy industry. It is like having ever-lasting oil wells in the sky and not tapping into them. This is a good way to reduce the amount of carbon we use.
We could be investing in public transport by providing a Luas system in Galway, Sligo, Cork, Limerick and in the heart of the Minister's constituency, rather than allowing the type of scenario witnessed at Silverbridge last week. These are policy choices that would reduce our carbon use in Ireland and we should be prioritising them. I am not saying we should not invest in Kazakhstan but we should not do so while neglecting our responsibilities at home. That is my gripe with the Minister. I also believe this would make Irish industry more competitive.
We should reconsider the proposal to hand out for free 90% to 97% of existing carbon allowances to major polluters. This would not happen in any other field of economic activity. It will result in competitive disadvantage to new entrants to the system. There is an elephant in the corner which we must face up to, namely, we must look beyond the Kyoto Protocol to the European Commission's view that we need a reduction of the order of 60% to 80% in carbon emissions in Europe by 2050. To do this would require us to crank up the system now.
The Minister ridiculed the Green Party's climate change targets Bill, which would have forced him to present an annual report to the Oireachtas on what is being done to reduce carbon emissions. We need to begin to reduce emissions by approximately 1% to 2% per year and the best time and place to do this is in Ireland right now. Sir Nicholas Stern clearly stated that a stitch in time saves nine. In other words, we would be better off reducing emissions now rather than having to pay a price for not doing so later on. The best way we can do this is for the Minister to take action in Ireland. I am frustrated with this discussion. While I do not disagree with reducing emissions in the countries mentioned in the motion before us today, I do not believe the Minister is doing enough to reduce emissions in Ireland. A few simple things such as investing in public transport, renewable energy and improving building regulations could achieve a great deal within a few short years and would leave us better equipped to address the much larger reductions required following 2012.
Deputy Cuffe stated that no other country would give carbon credits away for free under the emissions trading scheme, ETS.
No, I did not. I am aware that many European countries are doing it. However, I do not think it is the best way of addressing the issue. I know it was introduced to bring in large polluters.
The EU directive specifically requires member states to allocate the majority of the allowances — I think it is 90% — to the companies being brought in. This is only phase 1. There is an important point of principle involved. I agree with Deputy Cuffe and have said time and again that this is an area in which a virtuous circle can be created resulting in a win-win situation. I believe, for example, that the Americans are extremely foolish, not just because they are not prepared to step up to the base and take on their moral responsibilities as the world's biggest polluters but because in the long term they will disadvantage American industry, which will be guzzling gas unless it is incentivised. It is not a question of member states having decided to give away credits, as the trading system must be created, which has been done very successfully in Europe. The directive prudently requires the bulk, or approximately 90%, to be given to those countries brought in. It is not something an individual member state could change — I know the Deputy is not suggesting Ireland should change it unilaterally — but the European Union has instigated this wise directive on the matter.
The Deputy has not done justice to what we have said on the other point at issue. Our purchasing cap will be 3.6 million tonnes, which the Deputy accepts. That will mean the rest, more than three quarters of our total target figure, must be met from a variety of domestic sources. Only three million tonnes of the balance will be associated with the trading scheme; the rest will fall to be made up through a series of measures.
The figure of 14.6 million tonnes is attainable under existing measures and inclusive of the 3.6 million tonnes purchased. Therefore, the net figure is approximately 11 million tonnes. To get to where we need to be by 2012, we must raise the figure to 11.6 million tonnes. We are 600,000 tonnes away from that figure, which does not factor in the changes being introduced and which will flow as a result of measures to be taken in the budget and which may be taken in the next one. More importantly, it does not yet take account of the savings to be made in public transport which will accrue from Transport 21.
I do not disagree with the Deputy's hypothesis that we must roll out public transport initiatives, or that there has been far too little investment in public transport by successive Governments. Unfortunately, it is not that easy simply to turn on the tap. Logically, the Deputy would agree that in the interim we should have a coherent plan in place to meet our Kyoto Protocol requirements, including the purchasing of credits. I credit him for accepting that it would be better to make savings without doing violence to industry or agriculture, which is making a massive contribution. The figure of 2.4 million tonnes will arise from implementation of the nitrates directive alone. The excellent circular letter issued by the IFA on the directive points out that it is costing the Government much money, but that it is being spent in a way we would agree is prudent. It means we will not have pollution, that we will have more sustainable processes in husbandry and agriculture and that farmers will receive assistance as they assist us. Therefore, it is unfair to suggest nothing is being done. I could take the whole evening to go through the long list but I do not want to do so, as members have a contribution to make.
Savings of some eight million tonnes have been identified. There will be a saving of three million tonnes in the trading sector. I have stated several times that the sector will do very well. There will be leaner and cleaner industries to everyone's benefit. The figure of 3.6 million tonnes is the target and the purchase should be made in a prudential way. The Deputy's colleague, Deputy Eamon Ryan, was worried that we would be buying hot air, the most mythical of all systems. Europe, including Ireland, is committed to the process. If a country wants to buy carbon credits, the best way of ensuring they will be bought in a way we can all defend is through an organisation such as the EBRD when there is a specific project-based objective and the results can be verified.
The Deputy equated the carbon credits market with the pork belly market. If it were just to develop in that way, the credits would all go to the rapidly emerging countries, such as India and China, thus leaving the poorest countries very far behind, as Deputy Cuffe and I know. The approach being taken is to have targeted programmes and I would like to see even more of them. I have said at European level that we will not be able to operate unilaterally and I believe the Deputy will accept that. Targeted programmes present the most virtuous way of buying carbon credits.
Global warming is the most important issue to face the world in this century and the manner in which we play our part is very important. While I disagree with much of the Government's policy on the matter, I believe the only valid approach is to make progress together and show leadership and promote best practice internationally.
If all the relevant countries, including China, fail to sign up to the protocol, a very significant barrier will be placed in the way of our success. Regardless of what the Government says, if the developing countries using fossil fuels at an alarming rate and buying up strategic resources in Africa and elsewhere do not sign up to the agreement, it will not work and will cripple our industry.
My constituency has traditionally had a cement industry and Premier Periclase is another significant energy-user there. In this regard, I am very conscious of the Minister's point that one must ensure industry is successful and not subject to an undue burden, notwithstanding the fact that industries must change their ways also, as that is part of the deal.
We must consider promoting and supporting the production of alternative fuels and replacement fuels. If industries can propose projects in the context of reducing carbon emissions, we should accept them. I have spoken to a number of industrialists on this issue and feel we could do a lot more constructive work as a community. I am not referring to political work but to the fact that the Parliament as a whole needs to negotiate with industries to determine what further measures can be taken, notwithstanding their commitments under the Kyoto Protocol.
Nobody is doing promotional work in this regard at ground level as part of his or her job. A number of energy committees throughout the country have been doing excellent work, the most significant of which has been in the Limerick-Clare area. The two county councils in this area have jointly created a climate change strategy and have worked out their carbon emissions on a county basis. They have determined how their emissions can be reduced over the years and are working proactively in this regard. This model should be adopted throughout the country.
I support the points made by Deputies Cuffe and Gilmore. We need to come to grips with the issue in a cross-party way and I, as a member of Fine Gael, have no problem saying I would like more engagement between the parties of the Government and Opposition.
Deputy Cuffe is correct regarding transport. I came to Dublin by car today. Perhaps I should have taken a train but I arrived home very late last night and had to get up early. I spent almost an hour sitting in traffic at the entrance to the Dublin Port tunnel at Whitehall. There were hundreds of cars involved and gardaí to beat the band but there was no movement. I do not envisage a park-and-ride strategy working for motorists on that route. In spite of all the money available to the Exchequer, we have not developed alternatives to travelling by car. Admittedly, one can take the train or bus, but many people have no choice but to take their cars. There is no coherent transport strategy such that motorists can park their cars near the airport or elsewhere and continue their journey by bus on a bus corridor. We must tackle these issues. Unless we have root-and-branch reform of how we manage transport, fossil fuels and greenhouse gases, we will not get it right. I accept and acknowledge it is good and constructive to enter the trading scheme and buy credits and the work we can do internationally. However, unless we take specific responsibility for carbon reductions in our communities, we will not get it right.
I will be happy to participate in such a forum if we can have one. Is this committee the correct place for it? In the approach to the general election, I would like to see us all signing off on where we will go. While there will be differences in some areas, we must tackle the issue in a combined and united front. The most important issue we will face in this century is reducing our emissions.
Deputy O'Dowd's contribution was very constructive and I thank him for it. He is absolutely correct that we must get the balance right. He chose two industries in his constituency which illustrate the point well, as they are emitters and cause problems. Regarding the second company mentioned by Deputy O'Dowd, we applied an extremely onerous interpretation of EU law to that company. It was extremely annoying to discover that other member states which sometimes eulogise about such matters did not apply the rules to the same degree as we did. Deputy O'Dowd is correct to state we cannot disadvantage or "beggar my neighbour". It would hit directly where it should not. I agree 110% with the Deputy.
When the Stern report was presented, a chilling point was made. If the entire economy of the United Kingdom closed down for a year, it would save 2% of global emissions. China would use it up in two to three months. Imagine what the effect would be in Ireland. We must get the balance right.
I also agree with Deputy O'Dowd that this is a job which everybody must do. He mentioned Limerick and Clare. The best example was when the Cork city manager decided he was fed up with major volumes of city-bound traffic on the roundabout near the airport and did something about it. Credit is due to him because local authorities get a lot of stick. He wanted to install a bus lane and a park and ride facility. However, he could not persuade the transport company to do it. He put in the bus lane and the park and ride facility and got a licence for a bus. It is wonderful and a fantastic success. It is extremely progressive and forward-looking. It illustrates the point that in small steps we can all solve the problem. The committee would do great work to discuss this issue and tease it out.
Another progressive step was taken in Cork when the corporation took the decision to switch to biodiesel for its fleet. I did the same. It is a small gesture and people state it is only tokenism. It is better to do it than not to do it. The national parks and wildlife service also uses biofuel. We do not have real disagreement on this. It is a major challenge. We have a moral responsibility to do our bit in the way which is most effective with least potential damage.
We cannot take on the yoke for the entire world. However, we can take on our moral responsibility. That is why I am anxious to buy the 20 million tonnes. I have an opportunity to buy it in a way which is morally speaking completely and absolutely defensible. The money is specifically earmarked for good and positive purposes in eastern Europe. I would prefer if it were in some of the world's poorest countries but perfection is sometimes the enemy of the good. We would achieve virtue in this respect.
I stated 2.4 million tonnes will be saved through the nitrates directive. Savings will also be made through the entire CAP, as destocking levels will play a major part. I agree with Deputy O'Dowd. I am not in a position to answer his query on whether a park and ride facility exists on the north side of the city or what the policy is, but a huge park and ride facility exists in Greystones which is not used. That is the problem.
That is wrong too. The Minister should use it.
Like the Deputy, I use the DART occasionally and find it much better. I wish I could use it all the time.
The issue is for the Minister to establish joined-up thinking with local government.
I am ahead of the Deputy. There is a Cabinet sub-committee which covers the environment, energy, agriculture, transport and finance. Deputy Cuffe made the point that the issue cuts across all functional areas. When an issue like this must be dealt with, the vertical functionality and typical organisation of Departments is not helpful. We have created the horizontal element Deputy O'Dowd wishes to see. To take up the Deputy's point, it might be very useful to invite representatives of Cork County Council, for example, to give a presentation. It is a good idea to give local authorities which are ahead of the posse the opportunity to show us an example of excellence. If it is best practice, it can then be applied elsewhere.
On the issue of park and ride facilities, I agree with Deputy O'Dowd that rather than provide the function to a central authority, it might be better to make the matter the responsibility of local authorities, which have the best information. The example from Cork is very good.
I listened with interest to Deputy Cuffe's contribution on alternative energy. Alternative energy must be considered seriously, but people who are prepared to put their hands down to the bottoms of their pockets are not writing to the Minister or asking me to approach him for a grant to erect wind turbines. They are prepared to put their hands to the bottoms of their pockets to build roads up hills and mountains, construct wind farms and provide massive amounts of energy at great expense. They are providing these wind farms in countryside from which the corncrake ran because it could not survive there. The only thing that is left is the snipe, which is getting terribly scarce also. When the snipe is gone, there will be nothing left in the mountains except heather. We have a perfect alternative source of energy, but local authorities are refusing the planning applications of people who are prepared to spend millions of euro to exploit it. Is the Minister fully aware of what is happening? They are being forced to reapply for permission or move their turbines further downhill and away from the good wind. This is the carry-on.
I appeal to the Minister to get deeply involved in this matter and commission a report on the behaviour of local authorities. They have refused permission for wind farms on the Curragh of Kildare and in parts of south Kerry and south-west Cork which are perfect for wind energy. People are prepared to pay massive sums to join the grid, hurting not a single person in the process. At a recent meeting of this committee we were shouting about telephone masts at the back of schoolhouses and at the top of the town of Kenmare, but wind turbines hurt nobody. They do not hurt schoolchildren or the people in towns and cities. Furthermore, the people who want to build them are prepared to pay for them themselves, yet they are being hindered by local authorities when they seek planning permission. In the name of God, I appeal to the Minister to examine these refusals, for which no sound reason exists in the earthly world.
I invite the Minister to visit the county boundaries in Cork and the borders of Kerry over the Christmas period and drive his car right up to the base of the windmills there. If he takes officials such as Mr. O'Mahony with him, they will see what I am talking about. Deputy Moynihan-Cronin knows exactly what I mean. Everybody knows what I am talking about. The amount being spent on manpower and machines for road improvement works is unbelievable. I guarantee that if the Minister comes to see what is happening, no local authority would be permitted to refuse planning permission for energy-related projects. I appeal to him to do something about this. He is more than welcome to visit border areas between Cork and Kerry during the Christmas period to see what we are talking about. It is not something he will easily forget.
The Deputy has made a good point. I am concerned about the issue of planning permission and inconsistencies in planning decisions. Environmentally, wind-energy projects have enormous potential. Wave-energy projects have even more potential, given that it is easier to determine times and so on. My colleague, the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, has introduced substantial targets for renewable energy sources, the bulk of which will be met by wind-energy projects. To support that objective, I introduced the special planning guidelines for windfarms earlier this year. They were launched at a windfarm in Cavan, on which occasion I spoke to many people who live in houses on the side of a mountain. They told me they had no problem with the windfarm. Sadly, a week after the guidelines were published I received a vituperative e-mail in which it was stated I was going to destroy the scenic amenity aspect of Ireland as a result of X, Y or Z. There is a need for more balance. Offshore wind-energy projects have enormous potential, despite the cost. All of these sources have been factored into the Green Paper.
Another point worth mentioning is that I have published proposals on what can be done by individual households. We have provided grant assistance for the installation of solar panels, which can be extremely effective in heating water and, therefore, preserving energy. We ran into difficulties this year, in that some local authorities adopted a perfectionist approach and demanded that people wishing to install solar panels first obtain planning permission, the cost of which was greater than the grant available. There is enormous interest in solar panels. The Department received more than 9,500 applications for grant assistance before the end of October. I have introduced new guidelines which provide that people will no longer be required to obtain planning permission for the installation of solar panels. Solar panels on the roof of a house do not offend anybody and their installation should be supported.
Another issue up for public discussion and reaction is that of planning exemptions for micro-windmills. Micro wind turbines are also an asset. I am sure Deputy O'Dowd will agree with me, as I understand Deputy Kenny is considering the location of a micro wind turbine in County Mayo.
Correct.
It is a great idea. The issue is being debated. My view was that it would be possible to join them to a building but health and safety issues suggest otherwise. Nonetheless, I have published a document on the matter.
We are looking at the major issue of how to generate electricity in traditional stations in a more environmentally positive manner and the minor issue of how individuals can create energy. It is not true to suggest we are not considering the full spectrum. The Power of One scheme, which has just commenced and which is supported Europe-wide is amazing. An issue on which I am sure we would all agree is that of the removal of stand-by buttons on television sets, which would result in the saving of a vast amount of electricity. The flat-screen television sets now available use almost four times the amount of electricity used by a standard television set. Therefore, making it easier for people to install solar panels and micro wind turbines would result in huge savings. The savings that could result from the Power of One scheme could be equivalent to 10% of the electric energy supplies being consumed, a vast saving. The saving in carbon production would also be enormous.
To reiterate, the motion was referred to the select committee for consideration only. Under Standing Orders, we are not in a position to accept, reject or amend it. A report to the effect that the committee has considered the motion will today be laid before Dáil Éireann. The format of the report has been circulated to members. Is that agreed? Agreed.
I thank the Minister and his officials for attending today's session. We have had a very comprehensive debate on the issue and look forward to a further comprehensive debate tomorrow.