As part of our newly launched Climate Action Hub, an ongoing Climate | Focus series of specialised research papers, blogs and commentaries intends to provoke thought and debate in this area of vital national interest.
The latest in the series considers climate-related spending as of 2024.
The Houses of the Oireachtas Climate Action Hub brings together expertise from across the Service to enhance our provision of climate-related information, research and analysis. With input from our Library & Research Service, the Parliamentary Budget Office, the committees secretariat and the sustainability unit, this hub is a repository of information related to climate action in the Service.
The Climate | Focus series is available on our Climate Hub.
In the latest entry to our Climate | Focus series, a Parliamentary Budget Office paper explores climate-related spending as of 2024 in the context of Ireland's obligations to reduce greenhouse gas emissions.
Some key points from the report:
Context
The Climate Action and Low Carbon Development (Amendment) Act 2021 targets a reduction in total emissions of 51% by 2030 compared to 2018 levels (68.3 Mt CO2 eq). Therefore the 2030 target is for emissions not to exceed c. 33.5 Mt CO2 eq. Achieving this 2030 target will require a real reduction of 52.4% on 2018 levels. This is higher than the initial 51% set out and represents a mismatch between the legislated target and the carbon budget target.
Expenditure
Gross Voted spending, excluding the allocations for the social insurance fund and national training fund in 2024 is €82.68 billion. The climate and environmentally favourable related expenditure within this is expected to reach €5.42 billion. While including climate related spending as an appendix to the Revised Estimates is valuable, the publication of a standalone detailed report Green Budgeting in REV 2024 (December 2023) is a welcome addition and significant step for green budgeting in Ireland.
Carbon tax expenditures
Carbon tax expenditures refer to how hypothecated carbon tax revenue is spent. They are not tax expenditures, or forgone tax revenue. Carbon tax expenditures have grown steadily, from €90 million in 2020 to a projected €788 million in 2024. The relationship between carbon tax spending in the Revised Estimates for Public Services and the more detailed presentation in Budget 2024: The Use of Carbon Tax Funds 2024 (2023) could be strengthened.