The 2021 IMF Country Report for Ireland highlights that Ireland has missed its 2020 EU climate target by a significant margin and that full implementation of the new ambitious climate agenda is needed to catch up and achieve 2030 targets. It also emphases that recovery policies should prioritise green investment that facilitates Ireland's transformation to a low carbon economy.
The Government is fully committed to meeting the climate challenge. The Climate Action and Low Carbon Development (Amendment) Act 2021, enacted in July 2021, commits Ireland to achieve a climate neutral economy by no later than 2050, and provides for a 51% reduction in greenhouse gas emissions by 2030 compared to 2018 levels. The Climate Act also establishes a significantly strengthened climate governance framework to support delivery of these targets, including the introduction and implementation of carbon budgets. The Climate Act also provides for maximum amount of emissions that are permitted in different sectors of the economy during a budget period, referred to as ‘sectoral emissions ceilings’. Putting these requirements in legislation places a clear obligation on this and future governments for sustained climate action.
The Climate Action Plan 2021 is being finalised and will be published shortly. The plan will bring forward policies and measures to support the delivery of the 51% reduction in carbon emissions by 2030, and put us on a pathway to climate neutrality no later than 2050. These steps will be challenging, but they will also create new opportunities.
The step up in ambition will require significant investment across the entire economy. It should be noted that a significant part of this investment has been anticipated and provided for through the commitments included in the recently published National Development Plan (NDP), which sets out the appropriate level of capital spending for the economy over the period to 2030.
The climate investment priorities included in the NDP must be delivered to help meet the targets set out in the current and future Climate Action Plans, and to achieve our climate objectives. The investment priorities represent a decisive shift towards the achievement of a decarbonised society, demonstrating the Government’s commitment to securing a carbon neutral future.
The distribution of costs and benefits arising from detailed policy design work, i.e. between the exchequer, individuals, and businesses, necessary to achieve the targets set out in the plan, will be determined by the mix of regulations, taxes, incentives and subsidies which the Government may choose to deploy to achieve the target abatement range in each sector.
