The re-establishment of the Executive is a major step forward for Northern Ireland, restoring a democratic government to tackle its myriad problems, as well as providing a voice to represent its interests within the UK.
But while last weekend's agreement in the North represents major progress, we are unlikely to see the new Executive being particularly active in the field of climate policy. The Executive of three years ago placed a very low priority on tackling climate change and there is no evidence of a change of heart.
This is regrettable for Northern Ireland. It’s also at odds with the leadership the UK government has shown in Europe over the last decade in tackling the problem.
In the past, the DUP leadership included climate deniers, and the other senior players in the party have shown little concern for tackling global warming. One of the many policy failings in the North that led to the “cash for ash” debacle was that all those involved were more interested in maximising the flow of money to Northern Ireland from the scheme than in producing a cost-effective measure to reduce greenhouse gas emissions.
Sinn Féin in this jurisdiction has opposed increasing carbon tax. It stood outside the cross-party consensus in the outgoing Dáil that such a measure is essential if we are to begin changing the scale at which we consume and emit carbon, by reflecting, in the price we pay, the costs to society of carbon emissions. Sinn Féin is also likely to be unenthusiastic on climate issues in the new Executive.
A Northern Executive that’s not interested in climate change will also pose a problem for the next minister for climate action south of the Border. While the new measures that are necessary can be pursued by the Republic alone, some of these actions will be less effective without the participation of Northern Ireland.
Carbon tax
The most obvious case where co-ordinated action on both sides of the Border is needed is on carbon tax. Over the coming decade, if the new Government acts to gradually ramp up carbon tax, as the all-party Oireachtas committee has advised, a significant price gap for fuels would develop between the North and the Republic, unless equivalent measures are adopted in the North.
With only a soft border, the likely outcome would be growing imports of dirty fossil fuels from the North, undermining our attempts to support greener choices through appropriate pricing.
Even today, when you drive across the Border, it is quite striking how many retailers advertise fossil fuels, including smoky coal. Clearly, these merchants already enjoy a substantial market in people from the Republic. With gradual increases in carbon taxes here, along with tighter regulation, this cross-border trade in dirty fuels will increase.
It is clear that co-ordinated climate action can deliver significant climate wins
The climate agenda needs to be taken seriously by governments in both jurisdictions on this island, with co-ordination of policy. Over the coming decade, for broad environmental reasons, we will need to end the burning of smoky fuels. This would be best done on an all-island basis to avoid the cross-border loophole.
The exemption of farmers’ diesel from tax in both jurisdictions needs to end and be replaced by a rebate to farmers, who would then pay the tax-inclusive price. This would have multiple environmental benefits, especially in Border areas where the “diesel cleaning industry” has brought some devastating pollution.
Spillover effects
The potential cross-border spillover economic effects of climate policy are well illustrated by events in 2013. In April that year, the UK government introduced a carbon price floor in Great Britain, but the Northern Ireland government exercised its permitted choice to opt out of that measure. The carbon price floor was a bold and effective policy, and it resulted in the closure of all coal-fired generation plants in mainland Britain.
Economic and Social Research Institute research has shown that, if the North had opted in, the carbon price floor would have raised electricity prices both North and South, but being a Northern measure, the revenue arising from the higher prices, on whichever side of the Border, would have flowed to the UK treasury. In turn, this would have meant that the best option for the Republic would have been to introduce a similar price floor, so that our Department of Finance got the revenue.
The result, if that had happened, would have been, like Britain, the early closure on this island of coal and peat electricity. This outcome would have reduced Irish greenhouse gas emissions by 10 per cent.
It is clear that co-ordinated cross-border climate action can deliver significant climate wins.
