I do not accept the premise on which this question is based: there is no failure to meet the targets set under the Kyoto period 2008-2012. The National Climate Change Strategy signalled the possibility of supplementing greenhouse gas emission reductions with the purchase of up to 3.6 million carbon units on average each year in the five-year Kyoto Protocol commitment period 2008-2012 or 18m units in total costing €270m, at a projected unit price of €15. Use of the flexible mechanisms available under the Kyoto Protocol provides a valid means towards meeting the legally binding targets.
Under the Carbon Fund Act 2007, the National Treasury Management Agency has been designated as purchasing agent for the State and in 2008, the Agency purchased 3.455m certified emission reduction units at a cost of some €52m. To date in 2009, they have purchased 1.8m units at a cost of €21.6m. No carbon units were purchased in 2007.
In December 2006, my Department entered into an agreement with the European Bank for Reconstruction and Development to invest €20 million for the purchase of carbon units in the Multilateral Carbon Credit Fund. The investment was made in 2006 on foot of a once-off provision from the Department's vote.
In January 2007, prior to the designation of the National Treasury Management Agency as purchasing agent, my Department committed €10 million each to the Carbon Fund for Europe and the BioCarbon Fund operated by the World Bank. Management of these investments is a matter for my Department and, since enactment of the 2007 Act, payments are made by the Agency through the Carbon Fund process as they arise. In 2008, my Department refunded €3.72m to the Carbon Fund in respect of these investments in the World Bank. Further payments of €1.9m to the World Bank have been made to date in 2009. Periodic drawdowns are a feature of these investments. The amount to be paid each year is not predetermined and in general payments will be made as purchasing transactions progress.
These investments with the World Bank and the European Bank for Reconstruction and Development are expected to yield some 3m carbon units at a projected cost of some €26m during the five-year Kyoto Protocol commitment period 2008-2012. The monies invested in actual purchases or committed to international carbon funds are therefore expected to yield in total, some 8.3m units in the 2008 to 2012 period, at an average cost of about €12 per unit.
The economic downturn has implications for the purchasing programme. The most recent EPA projections suggest that with full implementation of all announced emission reduction measures the purchase requirement for carbon units will now be between 1.3 and 1.8m units per annum or between 6.5m and 9m units in total over the 2008-2012 period. In the circumstances, the National Treasury Management Agency has been asked to put its purchasing programme on hold for the foreseeable future.
Ireland is on course to meet its targets for the Kyoto period with significantly fewer carbon credit purchases than had been envisaged originally. Purchasing requirements to ensure Kyoto compliance are being kept under review and will be revised as necessary in the light of future projections. If it transpires that more credits have been bought than are needed in the 2008-2012 period, they can be carried forward for use after 2012 in the next commitment period.