Large-scale overseas purchases of carbon credits, as supported in these pages by Donal Buckley of Ibec, would be ill-judged, argues Oisín Coghlan
The Government's plan to purchase at least €270 million worth of pollution permits overseas is a breach of the spirit, and most likely the letter, of the Kyoto Protocol on Climate Change. It is a U-turn based on pandering to vested interests rather than sound economic analysis. It will penalise ordinary taxpayers instead of polluters, while failing to trigger the shift to a sustainable economy.
The latest official projections are that, without new policies and measures, we will exceed our Kyoto target by 35 million tonnes of greenhouse gas emissions over the five-year period from 2008-2012. The protocol is clear that buying credits internationally to cover such an overshoot can only be "supplemental to domestic actions for the purposes of meeting commitments".
In his Budget speech on December 6th, Brian Cowen insisted that "we will meet our Kyoto target mainly through reductions in greenhouse gas emissions in our own economy". And yet in his very next sentence the Minister indicated the Government planned to buy credits for 18 million tonnes of emissions, just over half Ireland's projected overshoot.
When you factor in that Irish businesses are preparing to buy about 10 million tonnes of credits through the EU trading scheme that leaves a maximum of seven million tonnes, or just 20 per cent of our overshoot, to be dealt with through "reductions in greenhouse gas emissions in our own economy". In such circumstances, it is hard to come to any other conclusion than that the Dáil was misled by the Minister. Moreover, the Government has yet to announce any new policies to achieve those limited domestic reductions.
Evading our Kyoto commitment in this manner is not only indefensible, but also uneconomic. The EU reckons that Europe's energy usage could be reduced by 20 per cent before 2020 just by cutting energy waste, at no net economic cost. Such an approach would bring us a long way towards honouring Kyoto.
Investing €270 million in energy efficiency, for example, would also reap enormous long-term benefits. It could be done by measures such as extending the greener homes scheme to cover insulation, tightening the building regulations and linking stamp duty rates to the new energy ratings for houses - the more energy efficient the house, the lower the rate.
But it would require a seriousness of purpose and a willingness to disturb vested interests in the building industry that have so far been singularly lacking.
The Government's plan also violates a core principle of sustainable development - to make the polluter pay. The money to buy the carbon credits will come from general taxation, in a form of stealth tax, hitting taxpayers no matter whether they make every effort to curb their own pollution or fail to make even a single change.
It would be much better to put a price on carbon and send a powerful signal to individuals and companies.
Income tax, PRSI or stamp duty could be reduced correspondingly.
Purchasing pollution permits internationally is not even the get- out clause that the phrase "buying our way out of Kyoto" suggests.
Whatever part of our projected emissions overshoot we fail to cut domestically before 2012 will simply be carried forward and added to our new reduction commitment post-2012.
The Government's procrastination is simply storing up a new "climate debt" Ireland will have to repay just like the national debt that dominated public discussion in the 1980s.
Ultimately, Ireland will have to do its fair share to prevent climate chaos and that means reducing our greenhouse gas emissions by two-thirds at the very least.
To achieve this, the transformation needed over the next 20 years is as big as the one Ireland has experienced in the last 20 years.
As the Stern report emphasises, if we start now the opportunities far outweigh the costs.
If we continue to procrastinate, the following 20 years will see an even bigger adjustment, with far more disruptive and uncertain consequences.
Oisín Coghlan is director of Friends of the Earth