As the Deputy will be aware, the Climate Action and Low Carbon Development (Amendment) Bill as enacted in July 2021 includes an interim target for 2030 of reducing greenhouse gases by 51% relative to 2018. The process of drawing up an updated Climate Action Plan, as led by the Minister for Environment, Climate and Communications, to reflect this increase in ambition is underway, with the new Plan to identify and set out the far reaching policy changes across every sector to deliver the necessary emissions reductions. The updated Plan is to be published shortly. The Deputy will also be aware that on 25 October the Climate Change Advisory Council proposed Ireland’s first carbon budget programme, consistent with a 51% reduction in greenhouse gases in 2030 relative to 2018.
There is no doubt that delivery of this level of climate ambition will be very challenging and will require transformational change for society and the economy. This will entail additional investment, comprising of private investment and public expenditure. Regarding the latter, the recently published National Development Plan (NDP) sets out the appropriate level of capital spending for the economy over the period to 2030. The allocation of these resources was informed by the needs identified in the development of the NDP, including climate priorities.
Decisions in relation to the current expenditure implications of the Climate Action Plan will be facilitated within the overall expenditure ceilings set out in the Summer Economic Statement and re-iterated at Budget 2022. The ceilings tie expenditure growth to the long-term growth rate of the economy. Stable public finances are essential in allowing us to make the significant large scale investments in climate mitigation and adaption outlined in the NDP.
I would also highlight to the Deputy that the revenues projected to be raised by increases in the carbon tax are to be allocated for climate action purposes. The commitment to increase the carbon tax gradually over the next decade to reach €100 a tonne by 2030 was given a legislative basis in the Finance Act of 2020. Placing the commitment to raise the carbon tax into legislation allows for multi-annual planning on the use of the resulting funds. For example in 2022, the revenue resulting from carbon tax receipts available for investment is €412m. This is comprised of the revenue made available in 2021 (€148m) and 2020 (€90m) and the allocation of an additional €174m as part of Budget 2022.
