The next item on the agenda is a submission from our friends in the Environmental Protection Agency. I welcome Dr. Mary Kelly, director general, and her team. We appreciate their appearance before the committee. Some of us have met some of the experts present during the course of our visit to Bali and I am sure the committee will find the delegation's submission very helpful. A copy has been forwarded to members and is displayed on screen. Perhaps Dr. Kelly will guide us through it. If somebody is not clear on an issue, we may ask her to stop and clarify it. When she finishes, members will ask questions. I indicate that while members of the committee have the advantage of absolute privilege, this does not apply to those attending, unfortunately, but given what we are discussing, this will not cause any difficulties.
Energy Policy: Discussion with Environmental Protection Agency.
Dr. Mary Kelly
I thank the Chairman and the committee for inviting the Environmental Protection Agency to make a presentation on the important issue of climate change. I will, first, introduce the members of the delegation. I am the director general of the agency; Dr. Padraic Larkin is the deputy director general and director of the office of climate, licensing and resource use; Dr. Ken Macken is the programme manager in the climate change unit; Ms Kelley Kizzier is the senior manager; and Dr. Frank McGovern the senior scientific officer in the same unit. Ms Kizzier, Dr. McGovern and Dr. Larkin attended the conference in Bali. As they are experts in various aspects of climate change, I asked them to accompany me in case committee members had detailed questions relating to these aspects.
As the Chairman said, I circulated a submission which I will go through as quickly as possible to leave time for questions. We are anxious to provide any help we can in this very complex and important area. I will begin with a general introduction to the Environmental Protection Agency and its role because there are many players involved in the area. I will then take the committee through some details that set out the challenge facing Ireland regarding the Kyoto Protocol.
The Environmental Protection Agency is an independent statutory body set up in 1993 under the Environmental Protection Agency Act. It has a wide range of responsibilities that cover the licensing and regulation of large-scale industrial and waste facilities, the licensing of genetically modified organisms, GMOs, monitoring and reporting on the environment and the co-ordination of environmental research. It also oversees the environmental responsibilities of local authorities to ensure they do their duty.
The agency is managed by a full-time board which consists of myself, the director general, and four other directors. We carry out our work through four offices. The office relevant to this discussion is the office of climate, licensing and resource use but there is also an office of environmental enforcement, an office of environmental assessment which also produces material on climate change, and an office of communications and corporate services. We are assisted in our work by an advisory committee of 12 members which was set up by the Minister and which meets several times a year to discuss issues of concern and give advice to the agency. The agency has a number of other advisory committees which are included in the paper members have received. Therefore, I will not list them now.
In recent years, as the threat of climate change became stronger, the Environmental Protection Agency established a climate change unit within its new office of climate, licensing and resource use to bring together the expertise to which the agency has had access. People were working in various areas but climate change is now such an important issue that we have brought them together in one unit. We aim to utilise the expertise available to us to advance the climate change agenda.
Climate change is recognised as the greatest threat to the planet and the greatest challenge facing mankind. There is strong scientific evidence in the fourth assessment report of the Intergovernmental Panel on Climate Change that the warming of the climate system due to human induced emissions is unequivocal. Major reductions in emissions of greenhouse gases throughout the world are now an accepted priority in nearly all countries. The United Nations Framework Convention on Climate Change, UNFCCC, provides the international structure through which global actions to address climate change are agreed. The objective of the UNFCCC is to stabilise atmospheric greenhouse gas concentrations at a level that would avoid dangerous human interference with the climate system.
The Kyoto Protocol set in motion a process for the reduction of greenhouse gas levels globally. Under the process Ireland was allowed a 13% increase on 1990 levels, when its emissions were 55.6 million tonnes of carbon dioxide equivalent. Many figures and percentages are used in this respect. Therefore, I ask committee members to bear with me as I try to keep them to a minimum. As our emissions in 1990 were 55.6 million tonnes of carbon dioxide equivalent, we were allowed a target of just under 63 million tonnes. However, economic growth in the meantime has meant that in the Environmental Protection Agency's recent 2006 report Ireland's emissions were found to be just under 70 million tonnes. Members will see a diagram on their screens indicating this growth. The red line shows a linear path to our Kyoto Protocol target, projecting from the 1990 baseline to 2012. We should have reached the end of that red line by 2012. The black line on the graph represents what is happening at present. Our emissions rose steeply throughout the 1990s and up until 2001 when the peak occurred. They then took a dip, rose again slightly and dropped again to some degree in 2006.
The decreases that took place over the period in question are mainly ascribed to the closure of the IFI fertiliser plant, which was a major energy user, to new and more efficient electricity generation plants — moving away from oil and towards gas — coming on line and to reductions in emissions from certain industrial processes. In addition, we can use the graph to track occasions on which some peat-fired and coal-fired electricity plants were off-line for operational reasons. The latter always causes a decrease. For example, the coal fired plant at Moneypoint was down for several months during 2006. As a result, there was a decrease in the level of emissions.
We have also provided a pie chart that provides a breakdown, by sector, of from where greenhouse gas emissions are coming in the Irish context. At 27.7%, agriculture is the single biggest contributor to greenhouse gases. It is followed by energy, at 22.3%, transport, at19.7%, and industry and commercial, at 17.2%. Waste and residential sources account for the remainder of the emissions.
Is Dr. Kelly in a position to provide a breakdown of the figure of 17.2% for emissions from the industrial and commercial sector? Is there some part of the sector which is responsible for far more emissions than others?
Dr. Mary Kelly
Yes. The cement and aluminium manufacturing industries are two high energy industries. There are not that many high-energy intensive industries in Ireland. A figure of more than 5% of costs is usually what is considered to represent high-energy intensity. There are probably a few industries, other than the two to which I referred, which fall into this category. We can provide a breakdown of the position.
Are waste emissions separate to residential and household emissions?
Dr. Mary Kelly
Yes. The waste heading refers to methane from landfill.
How can the two be separated? Does not landfill include residential waste?
Dr. Mary Kelly
Residential emissions relate to space heating for houses, etc. Emissions under the heading of waste emanate directly from waste facilities.
Does household lighting come under "residential" or "energy"?
Dr. Mary Kelly
It comes under "residential". The energy heading relates to power generation. An oil refinery is also included under the latter.
The most startling aspects of the document are the figures relating to the increases that have occurred and the graph which shows how far short we are falling of the target set for us. The figure for 2006 represents a rise of 25.5% over that which obtained in 1990. It is stated in the document that because Moneypoint was closed for a certain period, the figure for carbon emissions in 2006 was lower than otherwise would have been the case. What would have been the figure if Moneypoint had been fully operational?
Dr. Mary Kelly
I am sure I can obtain that figure for the Deputy. However, she can take it that the line on the graph would not have dipped as much. We can calculate the figure for the Deputy.
Apart from that blip, there has been steady growth in the level of emissions.
Dr. Mary Kelly
As in other years, the increase relating to transport was very high in 2006 and this has driven the overall figure upwards. The level of emissions in almost all other sectors decreased marginally in 2006, which is a welcome development.
We understand that point. However, the temporary closure of Moneypoint is hardly something from which we can take any satisfaction. Taking this out of the equation, what is the actual energy situation for 2006?
Dr. Mary Kelly
In 2005, for example, energy was 16,336,000 tonnes and in 2006 it was 15,590,000 tonnes. Appendix 1 contains a table in respect of the position between 1990 and 2006. The Deputy will note from the information in respect of energy, that the closure of Moneypoint resulted in a difference of 800,000 tonnes.
We can track any change on the graph. If one takes out a peat plant and replaces it with gas, one will have a ball. The situation is very much dependent on with what one replaces a particular plant. This can be tracked on the graph. Turning off Moneypoint which has a very high carbon intensity will clearly result in lower CO2 emissions.
The point I am making is that this was not done for reasons of climate change. It is not that we are making any progress.
Dr. Mary Kelly
No, it was not done for climate change reasons.
Exactly.
Dr. Mary Kelly
The briefing note at the back of the document which is an inventory that we produce on an annual basis gives a detailed account in this regard.
I will move on now to the impacts of climate change. Climate change impacts are set to become much more obvious over the coming decades, although they are already obvious in many places. The current concentrations of greenhouse gases in the atmosphere coupled with the slow response of climate systems to energy being trapped have quite a number of implications for climate conditions. What is obvious at the moment is that there is a further unavoidable increase in global temperature of 0.6° centigrade during this century. Nothing we do in the short term will change this. The temperature will increase by 0.6° centigrade by the end of the century no matter what happens.
Current and future actions to reduce greenhouse gas emissions will have minor or no impact on those impacts in the first half of the century. This means the actions we are planning and talking about today in terms of their urgency are actions that are required to reduce greenhouse gas emissions to limit the extent towards the second half of the century. We are already set on a pattern for the first half of the century.
In addition, climate impacts will be direct as Ireland's climate changes, and indirect due to spillover of impacts in other parts of Europe and the rest of the world. The climate impacts for Ireland are likely to be manageable if effective actions are taken to reduce greenhouse gas emissions. I say this relatively speaking because the consequences of climate change if it is unchecked for other parts of the world are likely to be catastrophic. We should not be in any way complacent about this. The spillover into other parts of the world and the instability which this can cause in other parts of the world, will inevitably have indirect effects in the Irish context.
I will deal now with some of the likely changes in Ireland's climate. Research carried out by the ICARUS unit of the National University of Ireland in Maynooth shows that Ireland's climate is changing in line with global trends. This can be measured in Ireland as is the case anywhere else. The research also shows that average temperatures will increase, particularly in winter and at night time. I am sure most people have already noticed these changes. We will have an intensified hydrological cycle which will result in much more variable precipitation with intense events. In other words, very heavy rainfall will be much more frequent.
On average, summertime precipitation is expected to decrease, particularly in the eastern region. However, this does not mean we will not experience heavy rainfall at times. Wetter winters are also anticipated in the north and west. There are implications for water management in terms of flooding and drought management. The rise in sea levels will bring increased risk of coastal flooding for the cities of Dublin and Cork and associated coastal erosion is expected to increase risks for certain infrastructure. Storm systems, driven by increasing north Atlantic sea surface temperatures, are projected to become stronger leading to more extreme weather events. It is very difficult to predict the weather in a particular place but the climate, on a larger scale, is easier to predict.
We must take these changes into account in planning for future development and provide protection to the most vulnerable areas. We need to prepare an adaptation policy and plans for use at both regional and local level. The impact can be expected not only in the form of flooding but on water supply and management, crops, flora and fauna and on water-borne diseases. We need to consider how we will adapt to what we know will be a different climate.
In our paper, we submit that there are many challenges and they are very complex. The biggest immediate challenge is in meeting our emissions reduction targets. Our latest inventory data show that Ireland's emission of greenhouse gases, at just under 70 million tonnes while our limit is just under 63 million, is 7 million tonnes above the target. The national climate change strategy sets out a plan for how Ireland can meet its reduction targets in respect of greenhouse gas emissions.
The plan for the period to 2012 requires all sectors to become involved, including many agencies and bodies such as ours. The post-2012 targets, proposed last week by the European Commission, are considerably more stringent, requiring reductions of approximately 20% on 2005 levels. A rough estimation implies that this would be equivalent to an overall limit of approximately 56 million tonnes per annum. We also have obligations in the form of increased penetration of renewable sources of energy so there are many challenges in just meeting the targets to which we have signed up.
That is a fascinating issue. The percentages quoted go over people's heads but they need to realise the effects climate change will have on day to day life. These facts should be made available to local authorities so that they can review development plans. The effects of flooding and future development are quite substantial and we must get the message out to local authorities and the media that it is something of huge importance. We have seen houses built on flood plains in other countries being swept away. That is the reality, in contrast to talk about mere percentages.
As well as local authorities, private companies and others directly connected should be involved. Dr. Kelly spoke about flooding in the port areas of Cork and Dublin. At the moment a rump in the Dublin Port Company wants to fill in 52 acres of Dublin Bay, despite most objective, sensible people saying it creates issues concerning the environment, such as the potential for flooding in Clontarf and Fairview. These issues are also directly connected with this debate.
People do not want to be flooded, whatever the cause.
I apologise to Dr. Kelly for interrupting but it is important to make such points as we go along.
Dr. Mary Kelly
It is very important. All plans and policies need to be climate-proofed. We need to integrate climate policy into every plan and into every infrastructural build in the country. Dublin City Council has started a climate change adaptation plan and is starting to build it into its thinking. Several other local authorities are beginning to do that. People need to understand that this is not an add-on but must be integrated at the planning stage and that every project should be measured against its adaptation to, and whether it will contribute to, climate change.
They must support the need for reduction and to take on board the sort of matters we are discussing here.
Dr. Mary Kelly
Yes. The recent building regulations require new house builds to be at a better standard than they were before which is a step in the right direction, although it should have been taken earlier.
It is eight years too late. In the intervening period did the EPA advise the Department of the Environment, Heritage and Local Government that it was in breach of EU regulations by not introducing its 1998 building standards?
Dr. Mary Kelly
No, we do not have a role in building regulations.
What is the EPA's role?
Dr. Mary Kelly
We would have identified the areas where residential building was increasing every year. Our role is to publish the figures to determine whether policies are working and to advise on future policy. We would not have stated specifically that the Department should change the building regulations or that it was in breach of a regulation but would have identified that as an area which could show gains.
This involves a political issue that we need to understand. During that period, when the rest of us were knocking our heads against the wall asking why these regulations were not being brought in, the Government introduced a new system that nobody understood to measure heat loss through the roof. The rest of the world was using a system that measured the level of energy required to heat a cubic metre of room space. If the EPA is ensuring that the Government is in line with European directives there is some mismatch there.
Dr. Mary Kelly
Sustainable Energy Ireland holds the brief for dealing with residential energy.
I apologise. We shall wait for SEI.
Are we to ask questions as we go along or save them until the end?
We should ask them later.
I have a lot of questions and I need to know whether I should ask them now or later.
If the Deputy has anything in particular he wishes to highlight he may do so. We can read through the report but if somebody feels that it is worth making a point or asking a question, he or she may do so.
I was trying to be respectful of the Chairman by waiting until the end of the presentation.
It might be easier if the report was read out first because it is so comprehensive that if we keep asking questions we would never get to the end of it.
We will stay quiet until Dr. Kelly is finished.
Dr. Mary Kelly
Our per capita emissions, at 17.9 tonnes, are the second highest in the European Union after Luxembourg. We really need to do something about this.
I wish to outline the EPA's role and responsibilities in respect of the climate change agenda because there are several other organisations, including SEI, which also have responsibilities in the area. Our activities cover three broad areas, as follows: the provision of information and analyses, such as the inventory included in the documentation furnished to the committee today; provision of support at national level; and engagement with EU and UN processes. This includes our attendance at, and support for, the Department of the Environment, Heritage and Local Government on technical and scientific issues connected with the Bali process and the preceding negotiations, implementation and assessments. The climate change programme encompasses these through several clearly defined roles and responsibilities many of which are provided in statutes. The Oireachtas alone determines our powers. We prepare reports for the European Union and United Nations on national emissions inventories and projections. This relates to greenhouse gases and transboundary air pollutants.
The regulation and administration of the EU emissions trading scheme also fall to us. I will go into a small amount of detail on some of these technical areas. There is technical advice and administration related to the Kyoto Protocol flexible mechanisms; implementation and operation of the national emissions trading registry; the provision of scientific, technical and socio-economic advice; and the communication of climate change issues, to which the Chairman has alluded. There is also the co-ordination of climate change research funding, a very important aspect of what we do.
I will comment briefly on each of these areas in order that the committee can get a feel for the very detailed and technical nature of the work we are doing. With regard to national emissions inventories, the Department of the Environment, Heritage and Local Government has designated the EPA as the inventory agency. We are responsible for the compilation and submission of various emissions data to many international bodies to which we must report. These include the European Union, the United Nations climate change convention body and the UNECE secretariat.
EPA inventory figures are the cornerstone underpinning the determination of Ireland's targets, as well as quantification of reductions achieved. In other words, it is within our agency that the baseline figures are verified and set. Our targets are set based on these numbers. We must also report figures on an annual basis and on how we are getting on in achieving our targets.
Experts from the agency are also active participants in the annual review of national submissions made by other countries. When we submit these figures, they are audited and peer reviewed by other countries. Similarly, we help to review figures from other countries.
We do not take the measurements by ourselves. We are dependent on a number of key data providers, with whom we have memoranda of understanding. They include SEI for the national energy balance and Departments responsible for transport, marine, agriculture, forestry and a number of other areas. There is a cross-agency and cross-departmental input.
The national emissions inventories consider what has happened in the past and we report in January on what happened in the previous year. We are one year in arrears, which is exactly what is required at the United Nations. Nobody has better figures. National emissions projections deal with what will happen the future. This is an area in which Ireland has not been as active. The primary aim in developing national emissions projections is to monitor progress in meeting our national and international emissions targets. This informs us, the Government and others as to the likely effects of current policies if they are continued. We extrapolate and model from past figures to the future but include in the models the effects of new policies and instruments introduced.
The national climate change strategy has, for the first time, identified the need to ensure annual greenhouse and acidifying gas emission projections are submitted annually to form part of an annual progress report to the Government on climate change. In future we will not only see what our performance has been, but we will also have a projection of what it will be if we continue as we are. We will report to the Department on this for the first time in the spring of this year and will also report to the European Union on a two-year cycle, beginning next year.
The emissions trading scheme is one of the key policy measures introduced by the European Union to tackle emissions of carbon dioxide and other greenhouse gases. It began in January 2005 with a pilot phase to 2007. The second phase began from 1 January this year to run with what we call the Kyoto phase from 2008 to 2012, coinciding with the commitment period. It is the largest cap and trade scheme in the world, covering 27 EU members states, with 12,000 installations across the Union. At the end of December the Council of the European Union reached political agreement on extending the EU emissions trading scheme to aviation. This will apply from the end of this year because the details still must be worked out.
The Environmental Protection Agency was assigned responsibility for implementation of an emissions trading scheme in Ireland and we are finalising the second national allocation plan, NAP, which will cover the period 2008 to 2012. This matter is before the European Commission. When overseeing implementation of an emissions trading scheme, the EPA is advised by a national allocation advisory group, set up by the Government, under the chairmanship of Dr. Ed Walsh who gives us advice on a NAP.
The successful functioning of an emissions trading scheme depends on the creation of a scarcity of allowances. It is a cap and trade scheme; a cap is set and within this limit companies involved can trade throughout the 27 EU member states. The scheme depends on the cap being set somewhat lower than the level companies need; this will produce a scarcity that will place a value on carbon. In the pilot phase there was a failure to create a scarcity. Therefore, while the price for carbon was initially good, once it became obvious that it would not be necessary to buy any because there was plenty in the system, the price fell to zero. This is an example of a market working as markets always do.
In the second phase, thanks to the information produced in the pilot phase, the European Union set the cap lower and this should produce a scarcity in the market. Consequentially, the price for carbon in the next period of the Kyoto Protocol stands at around €20 to €22 per tonne. In the initial part of the pilot phase it traded for as high as €30 per tonne but when it became obvious that there would be no scarcity towards the end, the price fell. I would not say the pilot scheme was a failure; it was a success in terms of setting up a complex scheme from scratch in a short period. All of the 12,000 companies are now trading, measuring carbon dioxide and reporting findings. Therefore, the pilot scheme was successful and we are now ready to begin with the real scheme.
About 100 of Ireland's largest producers of carbon emissions are covered by the scheme. This represents about one third of national greenhouse gas emissions. The scheme provides an assurance that, within the European allocation, emissions reductions can be made at the lowest cost. Therefore, an economic view of reducing carbon emissions is taken. The scheme will result in emissions reductions in the European Union.
The diagram on committee members' screens is complicated. I will attempt to explain it. The bottom red line is Ireland's target under the Kyoto Protocol of 63 million tonnes of carbon dioxide. The top line represents a projection of business as usual, if no measures were taken since agreeing to the Kyoto Protocol, and shows that we would be at nearly 80 million tonnes of carbon dioxide. The grey area includes measures already taken.
What are the measures that have been taken?
Dr. Mary Kelly
They include Ireland's renewable energy obligations which we are likely to meet, the reform of the Common Agricultural Policy, some public transport measures, vehicle efficiency improvements and fiscal measures to promote the use of biofuels.
Are they included in the national climate change strategy?
Dr. Mary Kelly
Yes, they are included in the strategy and as we are confident they will happen, we have included them in our projections. The diagram shows what will happen when they kick in. The projection extends to 2012. The yellow area on the diagram shows the influence of additional measures being taken; it incorporates the effects of additional policies and measures adopted subsequent to the preparation of these projections and accounts for 2 million tonnes of carbon dioxide per annum.
What does the EPA include in that regard?
Dr. Mary Kelly
It includes a biofuels obligation, a modal shift through Transport 21 and other such issues.
A number are still earmarked.
Dr. Mary Kelly
They are earmarked but they were probably not as far advanced when these projections were made in respect of the national allocation plan by consultants appointed by the Department of the Environment, Heritage and Local Government. The grey shaded area on the graph represents what is in the pipeline and the yellow shaded area represents those projects that were somewhat less definite. However, the latter projects should happen.
The next area on the graph shows what will happen as a result of the emissions trading effect and illustrates what the 100 companies involved in emissions trading are expected to contribute. The blue section at the bottom of the graph represents the gap that remains to be closed to reach our Kyoto target. This is what the Government intends to purchase and it provided €290 million in the budget for this purpose.
This is an extremely complicated matter.
The shaded grey area relating to the emissions trading effect does not represent Ireland reducing its emissions. It represents companies buying carbon credits to compensate for the fact that their emissions are above the relevant cap.
Dr. Mary Kelly
That is not necessarily the case. It is a mixture.
It is a combination of the two.
Dr. Mary Kelly
Precisely.
Does this relate to the area of industry and commercial and the figure of 17.2%?
Dr. Mary Kelly
Yes.
They are the top 100 companies.
Dr. Mary Kelly
They are the biggest energy-using companies. Powergen is also included in this regard under "energy".
The national allocation plan was, in large measure, agreed to regulate the position as regards our emissions trading. The EPA's first submission on the national allocation plan was not approved and it was obliged to reduce the level of 700,000 tonnes. What process was used to facilitate this reduction? Was it done by the EPA in the context of suggesting sectoral reductions?
Dr. Mary Kelly
Under the national allocation plan, the Government decides the overall cap and the Environmental Protection Agency is responsible for dividing this between the 100 companies.
So the Government came up with a figure of 700,000 tonnes.
Dr. Mary Kelly
Yes.
On which sectors did the EPA focus? I wish to understand the nature of the process used.
Dr. Mary Kelly
Perhaps we can return to that question at the end of the meeting. I will ask Ken Macken, who deals with the national allocation plan, to provide the Deputy with the relevant details.
Further to Deputy Coveney's question, is it possible to quantify real or purchased savings in the context of the emissions trading effect section of the graph? Theoretically, we are complying. However, it is better for us to know what are genuine savings. Is it possible to identify genuine savings?
Dr. Mary Kelly
Yes. At the end of every year, the companies are obliged to return allowances to us in respect of what they have emitted. We know, therefore, whether they have been purchased or saved.
So in the future there will be a much clearer graph in respect of where we are going.
Dr. Mary Kelly
Absolutely. There are two issues that arise. The first is Ireland's compliance with Kyoto, which the graph addresses, under which the buying and selling of credits is allowed and perfectly valid. The second issue is a domestic reduction policy. It is useful to look at both. On our Kyoto compliance, we are currently on the path to which I refer in the context of achieving it.
Does it only apply to 100 companies?
Dr. Mary Kelly
The emissions trading scheme only applies to 100 companies but Kyoto applies to the country as whole. Members can see from the graph the share of the burden that falls on the 100 companies to which I refer. It is a pro rata system. The companies contribute just over one third of the emissions and they are liable for just over one third of the reductions.
It is not strictly true to say that the emissions trading scheme only applies to the top 100 companies. Ireland Inc., through Government purchases, also needs to compensate for the fact that the country is above its emissions target. In reality, if the additional measures do not work as effectively as illustrated on the graph, the blue dotted line will be far steeper at a time when the value of carbon is increasing.
Dr. Mary Kelly
I take the Deputy's point. However, the emissions trading scheme is confined to the companies involved. Government trading is a different pot.
Yes.
Dr. Mary Kelly
The Deputy will note from the graph that we are now at 70 and not at 78, as predicted. We are marginally above the yellow line at the moment. The bulk of the "with measures" in the grey shaded area have already kicked-in. I am not trying to place this down but we have actually achieved a reduction in terms of the projected level. We face a challenge in terms of reducing it further. However, some progress is being made.
Are the carbon credits that are being traded or purchased verified or certified? Who does the certification? Who undertakes the audit of emissions and from where is this regulated? I do not trust this.
Dr. Mary Kelly
May I come back to that point? I will speak now about the Kyoto Protocol flexible mechanisms and when I am finished I will ask Kelley Kizzier, the expert on the mechanisms and how they are verified and certified, to answer that question. It is a confusing area. Ms Kizzier is the best person to answer the Senator's question. If I may, I will come back to the Senator's point later.
I will now provide the committee with a brief outline of the Kyoto Protocol mechanisms. Ms Kizzier will then respond to any questions in that regard.
When the Kyoto Protocol was signed it defined three flexible mechanisms. These were to be innovative ways to lower the cost of compliance with emission targets for all countries that signed up to the Kyoto Protocol. A number of the terms used including the acronyms and so on are a little confusing.
The first of the flexible mechanisms is, international emissions trading. This provides for developed countries, also known as Annex 1 parties, to acquire units from other Annex 1 parties — in other words, other countries that have signed the protocol — and use them towards meeting their emissions targets thereby resulting in savings in one country being offset against savings in another country.
The Kyoto Protocol also allows for emissions reductions to be carried out in projects implemented abroad through the clean development mechanism, CDM, and joint implementation, JI. These are what are known as project-based mechanisms. They allow parties to the Kyoto Protocol — countries that have signed the protocol — to implement emissions reductions projects in other countries in exchange for credits which can be used towards achieving the Kyoto target. Projects carried out in countries with a Kyoto target operate under joint implementation and the credits earned are called emission reduction units, ERUs. Projects carried out in countries without a Kyoto target operate under the clean development mechanism, CDM, and the credits earned are called certified emission reductions. I can understand how all the terms begin to create confusion.
The CDM generates investment in developing countries, especially from the private sector. This promotes the transfer of environmentally friendly technologies. Resource and technology transfer from developed countries to developing countries through these project mechanisms was one of the essential commitments given during the Kyoto negotiations in order to secure the involvement of poorer countries. A point often missed by people when talking about countries buying their way out of trouble is that the poorer and developing countries would not have signed up to the Kyoto Protocol if developed countries had not agreed to the inclusion of CDM projects. This is the only way they can get private sector and other investment in their countries in terms of up-to-date technology. It is important to remember that developing countries, as well as developed countries, want these mechanisms in place.
Who decides what is dealt with under the clean development mechanism, CDM, as opposed to the other schemes?
Dr. Mary Kelly
It is the United Nations office based in Bonn. It has a very rigorous system.
I know the system. Dr. Kelly said trading only took place across the 27 EU member states.
Dr. Mary Kelly
That related to emissions trading, the scheme we run, but they are two separate schemes. Emissions trading is an EU scheme and international emissions trading takes place under the Kyoto Agreement. They are two separate schemes but they sound quite similar.
I understand. That is very clear.
I am aware Ms Kizzier will answer some of these questions later and I remember having an animated discussion with her in Bali on this subject. Do the certificates measure emissions reductions per tonne or on a value basis? For every tonne over the cap Ireland would need a certificate for another tonne under the CDM mechanism.
Dr. Mary Kelly
That is correct.
Does that mean they can be stored for a period of years to increase in value?
Dr. Mary Kelly
Yes they can be, as it involves a market mechanism.
In that case, someone could buy them at the current price, €21 per tonne.
Dr. Mary Kelly
Yes, but only within the period 2008-2012. In the pilot phase they could not be carried over though they now can.
How do we find out when they are used?
Dr. Mary Kelly
Ms Kizzier will answer that. We are getting into the detail and it is very complex.
This is the nub of the issue. Nobody understands the mechanism involved.
Could a country speculate by buying emissions and selling them on at a profit?
Dr. Mary Kelly
Yes, and companies have been set up to trade them and make money. The market mechanism is designed to achieve the reduction at the other end. The important thing, at a more general level, is that reductions are made following the financial transactions. There is a reduction of a tonne of carbon dioxide for the financial transaction. Because it is a global problem, and such a big problem, it does not matter from the point of view of climate change where the tonne is saved, be it China, India or Ireland. We can all take the view that we should make the reduction in Ireland but from the economic viewpoint it does not matter to the planet where the emissions are saved.
Is there a target for Ireland? Is such a target part of the deal?
Dr. Mary Kelly
Yes.
What is the target?
Dr. Mary Kelly
It depends on what the Deputy means.
I mean a target for credits.
Dr. Mary Kelly
There are many targets. The target is 56 million tonnes of carbon dioxide per annum. Perhaps the Deputy is asking whether we could buy all our credits. We cannot. The CDM mechanism must always be supplemental to domestic action, so the latter must make up the bulk of what we do.
We were told in another committee yesterday that the price of a carbon tonne is expected to go up to €27 in a very short period. Dr. Kelly tells us it is €21.
Dr. Mary Kelly
It is between €20 and €22.
If the market gets involved it surely perverts everything the agency is trying to do.
It proves one thing — that it is in our interests to get the emissions figures down rather than spend money buying into this scheme. This is very dangerous.
Can we afford it?
Dr. Mary Kelly
That is exactly the question. The higher the price goes the more incentive we have to reduce. At €100 per tonne we would be silly to buy carbon if we could make reductions at €50 per tonne.
We are currently emitting 70 million tonnes of carbon into the atmosphere. Our commitment under the Kyoto Protocol is 63 million tonnes, so we must find the difference, whether through companies engaging in the trading system or through the current mechanisms.
Dr. Mary Kelly
As the graph shows, there are several measures for reductions and there is currently a residual amount to be bought or reduced. Following the measures the Government has put in place it is obliged to buy the residual amount, shown in blue on the chart, amounting to some 3 million tonnes. Trading can take place among companies.
I can understand why people want to hone in on this point because we had the benefit of listening to Ms Kelley Kizzier and Dr. Frank McGovern in Bali. This is extremely complicated. Would Dr. Kelly come back again to deal with particular issues such as the trading system?
Dr. Mary Kelly
Absolutely.
That would be very helpful.
We are only asking bitty questions.
We are trying to get a broad picture today but will have to come back to the detail, with Dr. Kelly's help.
It is impossible to take in all that we have been told today.
It is important to try to have an understanding of the material. I would like to finish this submission because I am conscious that members will be leaving to attend other committees and the Seanad. With respect to those who have travelled, I do not want to be here alone.
Dr. Mary Kelly
I thought that today I would give the committee a flavour of what the EPA does overall.
Excellent.
Dr. Mary Kelly
Of course, we are at the committee's disposal if it wishes to ask us further questions. We have experts who can explain the detail.
We are also responsible for a national emissions trading registry, which is also complicated. This keeps track of all the trading done in the various mechanisms. Under the protocol and the EU emissions trading scheme, ETS, Ireland is required to establish and implement a national registry to track the creation, holding, transfer and compliance processes associated with the different units such as the assigned amount units, Kyoto project units and European allowance units. Each national registry must conform to detailed technical standards. We run the registry within the EPA.
We provide information and analyses for the Department of the Environment, Heritage and Local Government and other Departments and State agencies on a range of climate change issues based on our in-house expertise and outputs from many of the research programmes that we fund. Components of the research programme are also developed in response to issues raised in these communications. We have a flexible research programme which, with the help of Departments, has in recent years identified the research needed, commissioned it and quickly fed the results back into policy.
We also provide support for the Department in the EU and UN processes such as the subsidiary body of the UN framework convention on climate change on scientific and technical advice on which Ms Kizzier sits and represent Ireland at designated expert meetings. Dr. McGovern does much of that work for us. We have internationally recognised expertise in the area. We have developed national participation in the Intergovernmental Panel on Climate Change, IPCC, processes and used our research funding to help Irish scientists make an input to this process because we want to develop that capacity and capability here.
The Chairman has identified communications as an important area of our work. The communication of issues and scientific findings to the public, as well as to our counterparts in State agencies, Departments and committees such as this, is essential. Our main communication vehicle is the EPA website which holds all the reports from EPA-funded research as well as providing web access to data from key research projects. We also post inventory and emissions trading data which the Economic and Social Research Institute and anyone else who wants it can use
Other approaches, which speak more to the public, include sponsorship of television programmes; for example, we sponsor Duncan Stewart's "Eco Eye" programme to a significant extent. We have been running climate change lectures which have been extremely popular. The series comprises seven parts, of which we ran two before Christmas. The rest are now taking place — one was held last week. We have managed, mainly through Dr. McGovern's contacts and other people, to invite very good scientists, all of whom have been involved in the IPCC in one way or another. They are very well-known people. We have had very large audiences, with more than 600 people in the Mansion House last Tuesday night to listen to a person speaking about the Antarctic. Speakers have been fantastic and it is amazing to listen to scientists who work on the cutting edge and see climate change before their eyes. One could not be anything but convinced when listening to them. If any members have nothing to do on a Tuesday, we have those lectures.
Does the EPA intend to move that series outside Dublin or provide facilities for people not in Dublin to monitor it on the Internet or elsewhere?
Dr. Mary Kelly
For those who cannot attend, we are putting all the output on the Internet. We have recorded the lectures and we are looking to see if we can do anything with the recordings. We are not completely sure about that. These people fly in and out of the country and it is difficult to move them around the nation. We will consider the matter. We never thought we would get such interest and an informed public.
We have airports outside Dublin.
Dr. Mary Kelly
Absolutely. We did not believe that even within a big catchment area such as Dublin we would get the level of interest we have. We now see people are interested, and the level of informed questions asked from the audience is fantastic. We will consider the matter again, although not for this series.
We intend to take our committee outside Dublin as well.
I do not believe 600 people will turn up.
Dr. Mary Kelly
The committee will be welcome in Wexford.
Research is a very important part of what we do. It aims to improve the understanding of climate change issues and identify nationally appropriate response options. There is an incredible amount of research done around the world on climate change but apart from contributing to the global research, we also want to ensure country-relevant research. In doing so, we will know the impact on Ireland of many events.
Our programme is very much informed by national, EU and UN policy objectives and is applied research in that sense. The output is made available to policymakers to inform policy decisions. Our first programme, under the last national development plan running from 2000 to 2006, has fed in very well to developing policy and helping the Department of the Environment, Heritage and Local Government negotiate. It also informs our knowledge of what is happening with the climate in Ireland.
Under the new national development plan running to 2013, we have been awarded an increase in funding for climate research. There is also a special fund under the strategy for science, technology and innovation, SSI. That has €8 million to be spent over two to three years, and this is already committed to projects within Ireland.
We have several objectives, mainly to provide a scientific basis for achievement of a sustainable greenhouse gas emissions profile for Ireland. We are also looking to provide analyses of climate change impact, key vulnerability and identification of sustainable adaptation options. It is very practical to identify impact and what we might do about it.
We are also looking to identify, develop and promote socio-economic and technological solutions to mitigate climate change and adapt to adverse impact of unavoidable climate change. We wish to develop improved analyses of air, land and ocean exchange processes and their drivers and develop climate observation and analysis systems. In the appendix to the material supplied to the committee, there is a list of published work from our first series of research and the layout of proposed projects under more recent plans for climate change research.
Under the Environmental Protection Agency Act, we have a mandate to co-ordinate environmental research in Ireland. We have tried to do this in the environmental area. With regard to climate change, a number of Departments and other agencies are doing research, so we have facilitated the establishment of a committee for the co-ordination of all this climate change research in Ireland. This committee looks to facilitate the exchange of information and strengthen co-operation while ensuring there is no overlap. We do not need many organisations doing the same thing. We receive good feedback from this, so research done in one area could be taken by the Department of Agriculture, Fisheries and Food, for example, to be funded further in another area. We are working on this at the moment.
I have tried to summarise the scale of the challenge involved in adapting to climate change and the work done by the Environmental Protection Agency to allow the committee to come back to us on various points as its work progresses over the years. The committee should know where the EPA fits into the equation and members are welcome to ask the experts in the organisation for help in understanding climate change and developing positions on the matter. The document gives a summary of the areas in which the EPA is active.
Our strategy documents and vision documents have said for some time that the integration of environmental issues into other policy areas is very important and nowhere is this more relevant than in the area of climate change. We regard this committee as very important in seeing that such integration occurs. I thank the Chairman and committee members for their time and attention.
I thank Dr. Kelly and her staff and I will now open the session to questions.
To reiterate Dr. Kelly's remarks, the document outlines the debate and explains many of the terms that are commonly used with regard to climate change. A report in The Irish Times at the weekend suggested the EPA is seeking a review of the national spatial strategy and, in the spirit of integration mentioned by Dr. Kelly, I wonder if this request has been discussed with IDA Ireland and the other agencies involved in the strategy, particularly as it is being used as a blueprint for economic and regional development. The report in The Irish Times gave the impression that the EPA seeks to have the spatial strategy diluted somewhat to reduce the amount of travel it would entail.
Regarding the role of the EPA as an enforcement authority, particularly with reference to planning and related matters, do the agency's representatives envisage a scenario wherein the EPA's duties as climate change watchdog and educator may be seen to clash with its duty as enforcer? For example, if the EPA were involved in licensing a power plant for a new low-emissions form of energy that would help us in our climate change goals but could damage the local environment how would it deal with such a scenario? Is there a procedure in place to deal with such potential conflicts of interest?
Dr. Mary Kelly
I shall ask Dr. Larkin to deal with that question as he works on the licensing side as well as the climate change side.
Dr. Padraic Larkin
Our comments on the national spatial strategy really grew from an examination of the rate of change in the various sectors that contribute to climate change. The table on page 18, on the back of appendix 1, shows changes in different sectors from 1990 to 2006. Transport emissions have gone from 5 million tonnes to almost 14 million tonnes and this sector shows the fastest rate of change of all. Agriculture is our biggest producer of emissions but it went from 19.9 million tonnes to 19.3 million tonnes between 1990 and 2006. The residential sector has also remained quite stable and energy use has not risen by much.
The transport sector has seen a huge increase in emissions and this is because many people are now travelling greater distances in Ireland than previously; for example, people now tend to live further from their places of employment. I am not suggesting this is anyone's fault but this is how we have allowed the country to develop. Taking demographics into account and using the most up to date figures on where people live from the Central Statistics Office we feel a good spatial strategy should put people and jobs close together to eliminate the need for much commuting: this was the aim of the original national spatial strategy. This is a broad, long-term goal but it is still possible and it would lead to better regional development. A better spatial strategy would not see people living in Mullingar and driving to work in Dublin; they would live and work in Mullingar with public transport to take them from A to B.
I accept this concept and Dr. Larkin is correct but the reality is that IDA Ireland is doing the opposite. IDA Ireland has gateways and hubs and this, effectively, renders everyone else ostracised. It is driving people towards gateways in particular and, to a lesser extent, towards hubs, and so far development has been focused on these population centres. Did the EPA engage in any interaction with IDA Ireland, the Department of the Environment, Heritage and Local Government — the parent Department for the national spatial strategy — or any other agencies?
Dr. Padraic Larkin
We have no direct involvement with physical planning. However, we are entitled to make suggestions across the board.
There is no clash between licensing and our ability. We are prohibited in law from granting licences if there is a possibility that local environmental pollution might occur. I cannot imagine a situation in which a clean power plant would cause local pollution. However, if such a situation arose, we would not allow it to continue.
This is an extremely valuable presentation. I look forward to our guests returning because what they have said has given us a great deal of food for thought.
I am of the opinion that an integrated approach is crucial. I am concerned, however, because I have the impression that the Government is not adopting such an approach. The Cabinet sub-committee on climate change has only met twice. The relevant officials have met on four occasions but the sub-committee has only done so twice. This is a signal that a concentrated effort is not being made at the very top. There has been a great deal of talk about climate change. It is as if the way to global warming is paved with good intentions.
We need an assessment of where we are going and the degree to which we are succeeding in meeting the targets we have set ourselves. The presentation made by our guests has been extremely useful in that regard. The impression left by the presentation is that some other EU countries have been considerably more successful in turning the tanker around. Will Dr. Kelly focus on outlining some of the key measures and real priorities in respect of which we need to achieve success? It would be of assistance were she to do so.
I was not aware of the EPA's monitoring role but I am of the view that it is extremely useful. Again, however, the authority is answerable to the Department of the Environment, Heritage and Local Government. Monitoring will be crucial. The year 2020 is somewhat similar to Valhalla. In other words, when we reach 2020 all these things will have been done. In reality, however, if we do not take action on a year-by-year basis, our targets will not be achieved. Everything will be backlogged, new governments will come into power and we will find ourselves in deeper trouble.
I support the Government on its 3% per year target. Will Dr. Kelly expand on how the monitoring in which the authority is engaged will ensure this target will be met? I recently asked the Minister for Communications, Energy and Natural Resources about the targets set for each Department for this year. He could not provide an answer but he did promise to communicate with me further on the matter. I will be obliged to give him time to compile the relevant information. However, it is not as if there is a clear road map in place with regard to how we will get from here to there in the context of what is to happen by 2020.
I wish to inquire about local authorities and the issues of flooding, rising sea levels and water shortages. Local authorities, as should be the case, are also the planning authorities. What is the relationship between them and the EPA in the context of development plans and forward planning? How does the process work? Is the EPA dependent on local authorities being proactive and stating these matters must be taken seriously? Is the authority in a position to ensure there is even-handedness throughout the country in the approach taken?
Dr. Mary Kelly
My experience is that other countries are struggling just as much as Ireland with this problem. Some countries have managed to reduce their emissions to a large degree. However, a proportion of the reduction in this regard relates to these countries' stages of development. Let us consider the position of Germany, for example, which has committed to reducing emissions by 40% by 2020. The fall of the Berlin Wall and the amalgamation of East Germany with West Germany have resulted in a reduction in its emissions. I am not saying it will not have to make an enormous effort to achieve the 40% reduction but it has already achieved a reduction. The move away from coal in the United Kingdom has resulted in an enormous gain. The Environmental Protection Agency has studied many countries — I cannot give a complete run-down on all of them — and believes Sweden is a country to which we could look in this regard. Ireland is not as big as the United Kingdom or Germany and does not compare with either in terms of population size. I read in an article recently that Sweden had managed to reduce its emissions by 9%. I do not believe there is an economic reason for this, rather that Sweden relentlessly pursued individual projects until they achieved success. This may address the points in respect of annual monitoring and reporting. We will examine the Swedish example to see if there are lessons to be learned. I am not certain that there are but we will examine what Sweden has done that we have not. Looking at it from the outside, it appears it relentlessly pursued a number of individual projects.
I will now deal with the Environmental Protection Agency's monitoring and inventory role which is a little hidden because it is not something in which people have been interested. However, we track every sector year-on-year in terms of increases and reductions in emissions. As I stated, the graph shows the situation when Moneypoint is switched on or off, when peat is used and when residential emissions increase or reduce. We need to figure out what we need to do in each sector and then pursue it relentlessly. I am not sure that addressing this Department by Department is the way to go. However, it should be addressed sector by sector. Some sectors may fall within the remit of particular Departments.
The Environmental Protection Agency has been invited to join a technical group which will examine the barriers to reductions in various sectors. The group has not yet commenced and we have not yet seen its terms of reference. However, this may be a starting point in pursuing the issue which must be addressed on a project by project and sector by sector basis.
Who is setting up the group?
Dr. Mary Kelly
From our point of view, it will reside within the Department of the Environment, Heritage and Local Government. I am not 100% sure who will provide the secretariat but have been informed it is being set up by the Taoiseach's office. It relates to the Government statement in response to burden sharing. It will be a technical advisory steering group which will oversee analysis and modelling of the cross-sectoral impacts. The Environmental Protection Agency has been invited to be a party to the group and we are hoping this will allow us to examine the barriers in each area and identify clear projects that will achieve results, of which there are some.
I agree with the Deputy that the 3% target is a good one. Since its announcement, a number of people have set about thinking how it can be achieved. I did not witness this much activity prior to the setting of the target which is concentrating people's minds on how we will address the issue. Even if one achieves a figure of only 2.5% rather than 3%, one will have moved forward. It is incredibly useful to have the target in place and for people to take it seriously and really pursue it.
May I have a response to my question on local authorities?
Dr. Mary Kelly
We do not have the authority to tell local authorities what to do in terms of planning. However, we can encourage them to do certain things. The one area in which we do have a little leverage over them is the strategic environmental assessment, SEA. All development plans must be submitted to the Environmental Protection Agency to decide whether they must undergo a strategic environmental assessment. While we cannot require local authorities to climate proof developments, we can advise them to do so. In general, local authorities take our advice seriously.
I am amazed at the talk about the need to set targets now and to examine this sector by sector. We made commitments under the Kyoto Protocol many years ago. Why did we not do that kind of sectoral targeting before now? Is it not the role of the EPA to raise that issue and say we have a legal obligation to prepare for 2008-12? Only now do we hear that it is a good idea to set targets for 3% a year. That is not criticism but frustration. We need the EPA to educate us on what we must do to meet the obligations to which we have signed up but this has not happened. I would like an honest assessment from the EPA of its relationship with the Government and how seriously it takes the EPA's advice.
Under the emission trading scheme, when the Government decides how to share the burden between companies and everybody else who produces carbon, it gives a figure to the EPA which allocates it across the 100 companies. Presumably the EPA will reduce the cap from the pilot scheme level but how, and is there a Government, or political, contribution to that process? Will it, for example, target the cement industry or the energy sector? What factors does the EPA consider in those decisions that are crucial for economic activity as well as emissions reductions?
Does the EPA think it would be helpful for us to try to make the targets the Government sets itself legally binding? That is being explored in the United Kingdom. I do not see how Governments can punish themselves in law but would that be a useful process?
We need the specialists here for an hour or so to tease out the clean development mechanism, CDM, issue. Is there duplication between the EPA, Science Foundation Ireland, Sustainable Energy Ireland and other research bodies, such as the Marine Institute in respect of wave and tidal energy, University College Cork or the University of Limerick? The EPA says it has a responsibility for research but SEI tells us the same thing. When the Minister speaks in the Dáil he talks about the role of SFI in allocating grants. Who is leading the drive for research in this area or is money being wasted on duplicated research or too many chiefs?
I might have a job for Deputy Coveney as a rapporteur for the committee recommending who should do or co-ordinate all this research. Maybe it is something this committee should recommend.
Dr. Mary Kelly
I did not mean to give Deputy Coveney the impression that there has been no sector by sector analysis up to now. Our state of the environment reports, published every four years, include a sector by sector analysis and have generally made recommendations as regards policy. We do not make policy but we clearly should give advice to Departments. We have brought up the sector by sector issue. We currently analyse sector by sector and can give advice on what should be done. I would not say there has been no sector by sector analysis.
The national climate change strategy, produced in the Department of the Environment, Heritage and Local Government, with input from all kinds of people, takes a sector by sector approach. The latest strategy considers each sector, identifying concrete measures. The problem is these probably do not go far enough and we must look further for higher targets. The strategy will get us to 2012 with some purchases but we should think about 2020 and 2050, with much deeper and more stringent cuts. We must speed up what we are doing. We have not been sitting idly by, watching problems in sectors increase and not giving advice.
The second question concerned the national allocation plan. The Government sets the overall number and in this national allocation plan, we also received a Government direction on what to take into account in allocating between the companies. This was a general direction but, for example, it directed us to treat the cement and power generation industries differently. This related to the power generation industry in particular because it could pass through costs.
If members wish to know about the plan at a later stage, Dr. Ken Macken is the expert on it. In developing the plan, we put the biggest cuts in the power generation sector, giving them 63% of what the business as usual would be. If people in the sector indicated they would emit a certain amount, we allocated to them free of charge approximately 63%. They must reduce emissions or buy their way out of the rest. This general direction to treat those sectors somewhat differently, as a result of their contribution and ability to pass on costs to the rest of the economy, was the only type of political process involved.
Was that a direction from the Department of the Environment, Heritage and Local Government?
Dr. Mary Kelly
No, it was a Government direction.
Therefore, it was political.
Dr. Mary Kelly
We have copies of it. The national allocation plan is on our website and appendix 1 has a Government decision conveyed to the EPA on 10 April 2006. It tells us what we are to do. For example, Government has directed that at least 89.5% of the total allowances be allocated free of charge. An appropriate quantity not greater than 10% should be issued to those who obtain a greenhouse gas emissions permit after 30 June 2006. There is a list but the main direction related to power generation and cement industries.
Does Dr. Kelly have any idea who would have informed that decision on behalf of Government?
The Senator might have a better idea.
We have to ask the experts.
Dr. Mary Kelly
The Senator probably would have a better idea.
It is directed in a particular way. That is very curious and we have much work to do in that area.
It may be a memo from a Department.
Dr. Mary Kelly
I have to assume it was informed by experts from the Departments of the Environment, Heritage and Local Government and Communications, Energy and Natural Resources as well as other Departments feeding into the process through their Ministers. This would not have been made up around the Cabinet table as it is very technical.
For example, it indicates due regard is to be taken in respect of power generation to Government policy on fuel diversity in constructing the national allocation plan. It gives a very clear steering with regard to policies but it does not instruct on giving certain amounts to this and that. We are left with leeway but we have clear direction, which we need, to do this according to Government policy. It tells us what the Government is most interested in. It is on the website.
I will have a look at it.
It is very interesting and I thank Dr. Kelly for her presentation.
I had a number of other questions.
Dr. Mary Kelly
I was asked whether it is helpful to make the figure of 3% legally binding. That is up to the Oireachtas but in my opinion it is not. I do not know who would enforce this or how it would work if the figure was only 2.5%; who would be punished? This is up to the Oireachtas and not the Environmental Protection Agency. The figure of 3% is helpful as it stands as a target against which we can measure ourselves every year. I do not know how much more powerful it would be if it were legally enforced.
The last question related to the co-ordination of research. The climate change strategy sets out that the EPA will continue its role of co-ordinating climate change research and the dissemination of outputs. In answer to the question, I do not believe there is any duplication; many people work in this field but they are working in different areas. Science Foundation Ireland is examining energy, Sustainable Energy Ireland is looking at alternative energies and renewable energy and the EPA has its own suite of research work. In terms of getting value for the money it administers on behalf of the Government, the EPA works on joint projects with the likes of the Council for Forestry Research and Development, Teagasc, SEI, the Marine Institute and universities. This ensures that the EPA gets the best quality research for its money. I spoke of a committee we set up, the footnote at the end of page 11 lists its members, and through it we get feedback on the work being carried out by the bodies mentioned, which ensures there is no duplication.
Does Dr. Kelly think it would be helpful to have a one-stop-shop where a person can go for a variety of reasons such as seeking grant aid, advice on an energy project or advice on the effect a product will have on climate change? A number of companies have come to my office because they are unsure to whom they must apply, whether it be the Department, SEI, SFI or the EPA. This is an issue Dr. Kelly could examine.
Dr. Mary Kelly
We could look at that matter and perhaps develop a portal that would facilitate people and direct them to the right agency. This is a matter that our committee could examine. The problem with climate change is it is very complex and influences every sector of society, so it is difficult to have a single agency that addresses all aspects of the matter. This is why so many bodies are involved but the EPA could look into developing a portal to direct people to the right agency.
I thank the EPA for the presentation, which was very interesting. We must take this opportunity to get expert advice on the Kyoto Protocol flexibility mechanisms and the national emissions registry.
In response to Deputy Coveney's question on the national allocation scheme, it was stated that the Government sets the number, but what does this mean? Does "the number" refer to the amount of carbon credits? How does the Government arrive at this figure? Surely there must be a context for this; the figures cannot simply be plucked from the sky. I accept that, despite the criticism, the first phase of the trading mechanism was useful and was a terrific learning process. If we take what has been learned from the first phase it can only be improved on. I am curious as to how the figure for carbon credits is arrived at and how much lower it must be.
The cement industry interests me because it is such a heavy polluter. We are all committed to reducing carbon emissions. The cement industry cannot be treated the same way in the next allocation phase. Hypothetically, if the Environmental Protection Agency was to receive a direction from Government giving favourable treatment to the cement industry, how might it react? I accept this is a slightly unfair question but we, as politicians, get them all the time. I would not mind hearing how the agency would deal with such a request.
What is the EPA's relationship with the National Treasury Management Agency? The trading scheme identifies the top 100 polluting companies. Are there any plans to increase the list or will it always contain the names of the 100 top polluters with some companies leaving and others being entered on the list? Dr. Kelly referred earlier to the trading scheme. I presume she was referring in this regard to the European trading scheme to which 12,000 companies report their CO2 figures. How can these companies be trusted?
I am conscious of time but I will allow Deputy Aylward to ask some brief questions.
I welcome this informative presentation which illustrates just how far we have to go to achieve a 3% reduction in emissions. The graph relates to emissions in respect of the waste, energy, residential, industry and commercial, transport and agriculture sectors. Coming from an agricultural background I am interested to know which sector produces the highest level of greenhouse gas emissions. How can we reduce emissions in the agriculture sector much of which is natural coming from livestock and so on? Reducing livestock is not a viable option for the farming sector. What incentives will be given to the different sectors in respect of achieving the overall target of 3%? Will each of the six sectors be set a target they must achieve to meet the overall reduction of 3%? What incentives will be provided to the agriculture sector in particular? What can be done in the agriculture sector to reduce emissions from 27.7% to 20% or whatever target is set?
Ireland is a nuclear free country and I do not believe there are any plans to change this. However, our nearest neighbour, the UK, appears to be going down this road and we may take from it nuclear produced energy by way of the proposed interconnectors. What effect would nuclear energy have on carbon emissions or greenhouse gas emissions? I am told it would not result in any emissions from carbon though I may be wrong on this. Is this an option we should consider?
Dr. Mary Kelly
Senator O'Malley asked about the national allocation plan, NAP. The Department of the Environment, Heritage and Local Government undertook a large consultancy process before setting the overall figure. Byrne Ó Cléirigh and ICF Consulting did a great deal of work over several years for the first and second allocations in terms of determining the sectoral amounts and projections. The Environmental Protection Agency also had an input into this process as did many other experts. At the end of the day the Government made the decision in respect of the overall number. However, the decision was a well-informed one based on a bottom up analysis of the entire sector.
Did it require verification from Europe or was it an utterly independent decision?
Dr. Mary Kelly
Yes, it had to be notified to the European Commission which had to accept it. The cap was set and then handed over to us. We then made the allocations and sent the national allocation plan, including the Government number, to Brussels. Brussels did not on this occasion accept our overall number and insisted on a cut partly because it did not accept our transport projections and wanted them reduced. Brussels keeps a close eye on what is happening and in this case reduced the cap somewhat as it did in almost every other country. There may have been a few exceptions but almost every country had reasonably big cuts made in what they proposed. The Commission is ensuring that this time around, there will be scarcity at the end of the day. The Government figure was based on projections and some of the research we commissioned fed into these projections. There is a very clear process for that.
Direction is given to us by Government. We must comply with any direction given by Government and it is not open to us to refuse to comply. We would not think about it either. When the Government gave us direction this time it was not favourable towards the cement sector; it was unfavourable. It singled out cement and power generation as the two sectors we should treat more harshly.
That is as one would expect.
Dr. Mary Kelly
Yes, it was the right action to take. The Government directed us to be hard on those sectors but when we put our plan for doing so to the Commission, we were told it was not fair, that we could not do it in this fashion and we would have to find another way because of competition.
Our relationship with the NTMA is very good and we have been involved with the body from the beginning, even before emissions trading was set up. It chaired the original group that considered emissions trading as a mechanism for dealing with climate change. The EPA has been involved since the early days with the NTMA.
The NTMA is represented on our national allocation advisory group and with our good relationship, we can advise on technical issues. We have no role in advising the body on the finance side but we meet people from the NTMA often.
There was a question on the emissions trading scheme. It is available to the top 100 companies, operating above a certain tonnage. It is up to the European Commission as to whether it will always be like this, and we are implementing a directive. It may be that in future, other sectors, gases, companies and issues will come into it. Currently the directive sets out who is included.
On the issue of whether the 12,000 companies can be trusted, all the emissions are verified. Another part of what we do relates to when companies submit to us their emissions for the year, as we send out a team to verify the emissions. These people go to the company and ensure the emissions figures are correct with the aid of independent verifiers. We are assured of this through a quality assured and quality controlled—
Is that an annual exercise?
Dr. Mary Kelly
Yes, it is an annual process. The same process occurs across Europe but in our case, as only 100 companies are involved, we are able to visit every one of them. I do not suppose the bigger countries could act similarly.
Do these companies monitor themselves?
Dr. Mary Kelly
They must do so as the process happens 24 hours a day, seven days a week. It is done automatically and we send independent verifiers accredited by the Irish National Accreditation Board. We are assured the figures submitted to us are correct. If we have any doubts we investigate the issue.
Could a company hoodwink the system and indicate they are at or better than the compliance level? Is the cross-check good enough?
Dr. Mary Kelly
It is unlikely a company would do so. Anybody could try to do so but they would be found out. Our job, done across a number of areas, is to put a system in place that cannot be beaten. The existing system should provide enough cross-checks to figure out if people are doing something else.
We know these companies because we license them under the integrated pollution control as well. It would be very difficult for them to tell us they did not have a certain level of carbon dioxide emissions when we know the process and are intimately involved in what they do. Our system is secure. I will ask Dr. Larkin to address the matter of agriculture because he specialises in that area.
Dr. Padraic Larkin
I am interested in it because, wearing a different cap, I have many dealings with the farming sector through the licensing of intensive agricultural activities. The agriculture table on page 18 shows that the numbers have fallen somewhat. This is partly to do with CAP reforms and so on. Livestock numbers have fallen. The agriculture sector has a 28% emissions rate, which is twice the global average. Therefore, farmers and the State have an opportunity to make reductions in this area. We can do this by encouraging farmers to switch from producing ruminant animals to producing fuels, including biofuels.
There are many opportunities in areas such as the production of timber, willow, miscanthus and grass. I want to emphasise the latter because Ireland is renowned for its grass, which farmers are very good at growing. Some 91% of Irish agricultural land is used for grassland production. Grass can be used as a fuel and to produce biomethane. I recommend that the committee listen to some experts in this area. Dr. Jerry Murphy of University College Cork is a member of the International Energy Agency and is very knowledgeable on the subject. I recommend that the committee talk to him about the potential of grass. If farmers switched to producing biofuels, the rural economy could be invigorated.
Is Dr. Larkin suggesting we should switch from more traditional forms of farming such as cattle and dairy farming?
Dr. Padraic Larkin
There is still plenty of room for dairy farming; there are between 7 million and 8 million cattle in Ireland and the same number of sheep. If a certain percentage of farmers switched to renewable fuels a win-win situation would ensue as lowering the number of ruminant animals leads to a reduction in methane. Using the grass those animals would have eaten to create a fuel to replaces fossil fuels would result in a gain. We have done some simple calculations that involve 15 tonnes per hectare; considering Ireland has 4.4 million hectares under grass one can calculate that this amounts to a very high tonnage.
Is Dr. Larkin referring to a reduction of 15 tonnes of carbon?
Dr. Padraic Larkin
Yes, it is possible that there could be a reduction of 15 tonnes of carbon per hectare but this must be verified. These figures are based on rough calculations of what can be achieved. I suggest the committee talk to Dr. Jerry Murphy who is an expert in this area and who has given me some of these figures. I can give his details to the clerk later. I see this as an opportunity for the farming sector.
Dr. Mary Kelly
The final question was on the nuclear option. We have no role in licensing nuclear energy production, as there is none in Ireland but all regulation of radiological activities falls within the remit of the Radiological Protection Institute of Ireland.
On a global level, nuclear power plays a role in the large-scale production of energy with low carbon dioxide emissions. The production of nuclear power does not emit carbon dioxide, although there may be some embedded in the building of plants and so on. Countries such as France, Sweden, the Netherlands, the United Kingdom and so on depend on nuclear power to keep emissions low and help meet climate change targets. The question facing us is whether we need to generate nuclear power in the Republic of Ireland or on the island of Ireland to secure energy supply and meet climate change targets.
The Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, has called for an informed debate on this subject, which the EPA would welcome. We would be happy to contribute to the discussion in any way we could, although we are not experts on nuclear energy, as we have never needed to be. The area is very complex and involves many issues, including security, environment, health and economics, to name a few. It would be useful to have the facts relating to these accessible to all to allow a meaningful debate which could lead to a decision on whether we wished to generate nuclear energy in Ireland.
It is correct that further interconnection with the United Kingdom will result in greater importation of nuclear power. If the EPA was to have an input into a debate on nuclear power, it would need to know how radioactive waste was to be disposed of, as this would be a critical issue. We have not examined this subject, as it has not been proposed since the EPA came into existence and is not within our remit. The full cost of clean up needs to be factored in. According to a report in one of today's newspapers it will cost €98 billion in the United Kingdom. The nuclear power there is old generation, however, and we will enter the debate when the nuclear industry is mature and we can see exactly the cost and implications of waste disposal, the clean up and decommissioning plants.
We should be conscious that investment in nuclear power can crowd out investment in renewable technologies, such as research into wind and wave power. The future from 2050 on is in solar power which is not market ready but is a clean source, wind energy some of which is on the market, and ocean energy which lies between those two. I would not like to think that by making a large investment in a nuclear plant here we would crowd out that kind of research and investment, which appears to be a more environmentally friendly and sustainable solution.
What is the tonnage of emissions from a small nuclear power plant?
Dr. Mary Kelly
It depends on what it would replace. If we turned off Moneypoint and turned on a nuclear plant we would reduce approximately 5 million tonnes which Moneypoint produces, which is a significant amount.
Our time is almost up and I want to call in Deputy Cuffe. There is also research into the possibility of using clean coal and the extraction of carbon.
Dr. Mary Kelly
Yes.
I apologise for my late arrival. I welcome the delegation. It is always daunting to face a doctor and to see four on the other side of the table is slightly intimidating. I am aware that doctors differ but in examining the different sectors here is there a consensus among the witnesses about where it would be easiest to effect reductions? This area is changing rapidly — some of us were in Brussels yesterday where Commissioner Dimas spoke about agriculture in New Zealand and what changes in diet can achieve.
Dr. Mary Kelly
That is a difficult question. If there were easy changes somebody would have seen them by now. We have examined the low-hanging fruit which are generally thought to be domestic buildings and transport. We classify that as areas that would cost between €5 and €8 per tonne. They could be managed through domestic policy such as energy efficiency standards, building codes, labelling schemes, motor tax, congestion charges, light bulb schemes, public awareness and targeted loan schemes which are distributed across different sectors. While they are reasonably cheap they are not easy to implement.
Mid-range abatement options, costing between €20 and €25 per tonne, include low renewable energy sources penetration, such as wind, co-firing biomass, some industrial sector emissions. Flexible mechanisms such as a carbon tax play a role in that range. Although we did not discuss carbon tax today we would welcome it. Regional emissions trading is another option. These measures lead to the most cost-efficient abatement strategies as well as producing savings. Dr. Larkin referred to the agriculture sector and spoke about a particular project relating to grass. There is a number of research projects in train and if we had time, Dr. McGovern could discuss the other work we are doing. There are areas in each sector which could be targeted and in respect of which progress could be made.
The Chairman referred to clean coal. This is a major issue and we could spend a month discussing it. Our outlook is that if there is a necessity to use coal in the future, it should be clean coal. We are engaged in two research projects, in the first of which the Irish coast is being examined to discover how carbon dioxide might be stored, while in the second the position at Moneypoint, where drilling is taking place, is being examined to see how it might be possible to engage in carbon capture.
Deputy Coveney referred to duplication. We are involved in the projects to which I refer with the Geological Survey of Ireland and SEI. We are dealing with a few agencies in examining something that is in everyone's interests. We are all investing money in the projects and ensuring our activities are co-ordinated. There is a great deal of activity taking place.
This has been a fascinating debate. We could remain here and discuss matters for a further two or three hours. I thank Dr. Kelly and her team for assisting the committee. Their presentation was educational. An initial part of the committee's work programme is to educate itself to the best degree possible.
In the context of monitoring, etc., we hope to play a role, particularly in inviting our guests to come before the committee on a regular basis in order to update members on how Ireland is coping in reaching its targets. Much of what needs to be done will revolve around our level of commitment. One of the committee's roles is to highlight issues that arise and failures that occur. We are not merely charged with highlighting such matters; it is our responsibility to exert pressure for change.
Dr. Larkin referred to transport and the trend towards people moving out of cities. We have done nothing to provide alternative transport, whether transporting goods by rail or sea, or investing in a proper rail system. We are capable of taking immediate action in respect of these matters. One need only consider what is happening in this city. Outside Leinster House, for example, one will see traffic backed up all the way to Merrion Square because of the one-way system on Pearse Street and double-decker buses trundling through O'Connell Street where there is no need for them. We must highlight matters of this nature and ensure action is taken in respect of them.
There are many issues about which I become annoyed. When the committee's work gets properly under way, I hope we can highlight these and exert pressure for change. Approximately €13 million has been spent to date on investigating an integrated ticketing system and the committee should be in a position to force matters in respect of the introduction of such a system. We must put a stop to the codology that occurs.
It is important for the committee to take every opportunity such as that with which it was presented today. I thank our guests for attending. I am aware that they have a great deal more to offer us. We had the pleasure of meeting Ms Kizzier and Dr. McGovern in Bali and need to discuss in detail with them the concept of flexible mechanisms. If there are other matters they consider worthy of discussion, perhaps our guests will advise us in respect of them when they next come before the committee. We will contact them about arranging another meeting on an appropriate date.
Would it be possible to have Professor Murphy attend?
That is a separate issue which the clerk to the committee is investigating. I agree with Deputy Aylward. We should engage in a debate on the subject of setting targets. I wanted to invite the Taoiseach to come before us because he is chairman of the Cabinet sub-committee. It is his responsibility to exert pressure on individual Ministers to discover ways and means to encourage their Departments to reduce emissions. That is the simplest way of proceeding and the easiest way to encourage action to be taken. It is for this reason that the Taoiseach has been invited to appear. I thank the delegation for a very informed session and colleagues for their attendance.