Government’s climate plan risks looking like yet more hot air

Promising “radical change” in the wake of local elections in which the green vote came out in force is undoubtedly a good political tactic for a party desperate to demonstrate its environmentally-friendly credentials.

And from Rebuilding Ireland to its Climate Action Plan, this Government can hardly be accused of not reaching for the stars. But its lofty ambitions, particularly where saving the planet is concerned, will only be of real value if they're achievable.

And even the loftiest of ambitions require some basis in reality, something a large part of the Government’s climate action plan appears to be lacking, according to several business leaders directly affected.

Analysis of the targets formally announced on Monday show some to be over-zealous aspirations and in other cases targets that will be almost impossible to reach – at least in the 10-year timeframe set across a number of metrics.

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Since publicising its plan a large part of the media coverage given to Government has been positive, but there has likewise been no shortage of detractors who question some aspects of the plan.

Take its desire to have 950,000 electric cars on the road by 2030. There’s little doubt amongst the automotive industry that we won’t even come close to this.

"There's no two ways about it: the future of motorcars is electric, but from an infrastructural point of view Ireland is years and years and years away," says Garry Finlay, sales director of the Finlay Motor Group which sells Ford and Volvo vehicles.

Consumers, said Finlay, would be quick to switch when they sensed the time was right, as evidenced by the mass switch by new car buyers from petrol to diesel models from July 2008 when the then Fianna Fáil/Green Party coalition viewed it as being the more environmentally-friendly fuel.

Consumers

And the figures to date don’t suggest that consumers are moving to electric vehicles in their droves. Only 1,901 of the 79,310 new cars registered this year were fully electric. To meet the Government’s target virtually every new car sold in the next 10 years will have to be electric.

Across the Volkswagen Group - that includes such brands as VW, Skoda, Seat and Audi - the target is that 40 per cent of its fleet will be electric by 2030. That means the majority will still be petrol or diesel.

Asked if the Government’s target that one million vehicles on the road will be powered by electricity by 2030 is realistic, Gerrit Heimberg, Volkswagen’s brand director in Ireland, says “the mathematical calculation shows that this isn’t feasible”.

Did the Government contact Volkswagen in advance of realising its plan?

“No, but we would welcome the opportunity,” Heimberg says. “We’re hoping we get a clear commitment from the Government in reducing CO2, but with realistic plans and a realistic timeframe keeping customer mobility in mind.”

Of course, it’s also worth noting that consumers will have to weigh up whether the cost of running an electric vehicle makes sense. Up to now charging of electric vehicles has been free but when that changes the cost of recharging your electric car may start to come closer to diesel or petrol.

This also presents a problem for the exchequer. Electric cars can avail of Government incentives to the tune of €10,000, and the lowest rate of motor tax. It is clear the State will have to recalibrate the current tax regime on cars to recoup any lost revenue from declining sales of diesel and petrol vehicles and the collection of tax on the fuels used by them.

All of these changes suggest that tax gathered from electric vehicle owners will eventually have to reach a level whereby the loss of other tax heads are covered.

For Green Party leader Eamon Ryan this is the weakest area of the plan.

“There’s no bright ideas coming out of the Department of Transport,” he tells The Irish Times, adding that there needs to be substantial changes in transport whereby the public begin to move away from the private car. His suggestion: car-sharing, based on the fact that “cars are parked for 95 per cent of the time”.

Road haulage

Outside of personal cars, there’s the issue of road haulage. Hauliers are critically important in keeping the economy ticking along every day. But a move away from diesel would threaten a business that only makes money when their vehicles are moving.

For an industry already dogged by rising insurance premiums, the prospect of carbon equalisation – whereby diesel costs the same as petrol – is extremely worrying.

"There is no readily available alternative to diesel for the haulage industry, and there won't be for decades to come," says Verona Murphy, president of the Irish Road Haulage Association and a Fine Gael general election candidate.

“For hauliers to have the confidence to invest in upgrading their fleet the Government needs to send a message that diesel prices will be stabilised for essential users such as coach and haulage operators through an effective and improved fuel rebate scheme.”

She says if the Government does not make such an assurance hauliers will not invest in their fleet and there will be older dirtier vehicles on our roads.

Murphy says in Belgium hauliers receive a 25 cent rebate per litre of fuel; here it is below 2 cent.

And she notes that there are immediate actions that can be taken to remove emissions from a sector responsible for about 5 per cent of the national emissions. These include removing barrier tolls on roads which cost a haulier about €1.20 from lost fuel and increase emissions by up to 10 times.

While she sees the plan as a “good start.....you can’t ban anything until you have an alternative, and we as a sector do not have an alternative.”

National grid

For those consumers that do change their private cars there’s the issue of charging a substantial number of vehicles every day on the national grid. At present this would include power from generating plants such as the coal-burning station at Moneypoint, Co Clare. It remains the Republic’s largest power plant, although the Government is committed to ending coal-burning for power generation by 2025.

In its place the Government wants 70 per cent of electricity to come from renewable sources by 2030. Last year it stood at just over 30 per cent. To get up to 70 per cent, according to one well placed source in the renewable sector, it will cost at least €10 billion.

Up to now we have added between 300 and 400 megawatts of wind per year, and now we are looking at more than doubling that.

“It’s certainly going to up the ante in terms of construction requirements,” the source said, adding that “this document is not dealing with the realism”.

The source also noted that the State has so significantly shifted its focus to 2030 targets, “because we failed so miserably at 2020”. However, because we have missed our 2020 targets we will be paying fines to the EU, the shortfall for which, this source suggested, may have to come from funds collected from an increase to the carbon tax.

This carbon tax, incidentally, is now set increase to €80 per tonne by 2030. The Economic and Social Research Institute (ESRI) says an increase in the tax to €100 would lead to a 10.24 per cent reduction in carbon emissions.

“My understanding is that the political system has agreed that the proceeds will not be used to buy credits; it will be used to protect those on lower incomes,” Eamon Ryan says. “There’ll be a fee and dividend model where, in my mind, the money should be returned directly to the people.”

While this may well be the intention, the fact that we had to spend €120 million between 2006 and 2017 on carbon credits to meet our emissions targets shows that the funds have to come from somewhere. So even though it may not come directly from carbon tax, the exchequer is footing the bill.

Properly insulated

One measure the Government wants to implement is a retrofit of 500,000 properties with energy efficient materials and install 400,000 heat pumps. Yet to make a heat pump worthwhile a property has to be properly insulated.

That, according to Tom Parlon, the president of the Construction Industry Federation, could cost between €40,000 and €50,000 per home for a deep retrofit. "People are going to need some incentive to do that," he says.

It is worth noting the construction industry is clear on the need for environmentally friendly construction standards, and the use of heat pumps forms part of that.

Mark Harris, the division technical director for Irish building materials group Kingspan, supports the promotion of heat pumps in homes. "They're far better than using gas or oil," he says. But he notes that a building's fabric needs to be dealt with before the heat pump can be installed.

Kingspan, incidentally, is nearing the end of a nine-year project to ensure the company has net zero emissions by 2020, one that was costed and detailed in a business plan before it was rolled out.

Verona Murphy isn’t clear that the business case for mass retrofitting of the Republic’s housing stock stacks up when there is “low-hanging fruit” to be dealt with first.

“A truck most weeks uses the same levels of fuel as a house in a year...So how does it make sense when you’ve got low-hanging fruit and we can have a saving immediately with a small input in comparison to the exchequer funding for retrofitting houses?”

And to deal with these mass construction plans we need workers. “We have a skills shortage and we’re working on that,” says Parlon, adding that the stabilising effect this level of work will have on the industry will be a boost.

Like the electric car issues the State will have to ensure that consumers are convinced there will not be another policy change in years to come. It was not long ago that oil boilers were incentivised through grant money. Under Monday’s climate action plan, installation of oil boilers will be banned from 2022, while installation of gas boilers will be banned from 2025.

Refurbishments

For those planning refurbishments from the beginning of next year if there’s substantial renovation involved, the rest of the building must be brought up to a Ber B2 rating.

While environmentally friendly, this means any work will come at a steep cost to the small businesses or households. And the question, as always, will be how those very same businesses and householders will be able to afford this.

Those working in the sectors affected say the Government will have to set out an all encompassing plan detailing how its targets will be achieved and supported, the likes of which we have not seen before. And to meet its 2030 deadline it will have to produce that plan relatively soon.

The issue, as explained by people in key sectors from renewables to construction, is that Monday’s climate action plan appears to have been written in a vacuum in which real world concerns were ignored.

If, as intended, the Government wants to inspire the public to monumentally shift the way in which it currently operates, it will soon need to lay out some substance. Otherwise, we can expect to add 2019’s climate action plan to the ever-heightening scrap heap of well-intentioned but fruitless public policies.