We must tackle climate change in a way that does not unfairly burden industry or undermine our economic and social progress, writes Donal Buckley.
Charles Dickens's creation, Mr Micawber, was, if you remember, ever hopeful that "something would turn up". The Government has adopted a similar approach to climate change.
Very hard choices now face Ireland. Nothing has turned up.
In 1997, the international community devised an international framework, the Kyoto Protocol, to limit rises in greenhouse gas levels which were shown to cause discernible effects on global climate. Signatories to the protocol received a country-specific target based on their 1990 emission levels.
Ireland has a particular problem. The last 16 years have transformed our country economically and socially, making it much more difficult for us to achieve our targets than could have been imagined when we signed up to them. (In contrast Britain has found it much easier, as its move from coal to gas has reduced emissions quite painlessly.) So, Ireland, like several other EU states, is heading well over its targets.
It was commendable of the EU to lead in addressing climate change but major emitters of greenhouse gases, such as the US and Australia, did not ratify Kyoto. Developing nations like China, Brazil and India did not have targets. At last the EU is now openly acknowledging that it cannot solve the problem alone. Europe's current 14 per cent share of world emissions will fall to 8 per cent by 2050. This contrasts starkly with the developing countries' rapidly rising emissions, which will exceed 50 per cent by 2050.
Even though Ireland's share of world emissions is well under 0.1 per cent and seems inconsequential, we do have a role to play, strongly supported by business, in driving the EU to support international frameworks where all major trading blocks tangibly participate. Within the EU, our negotiators must ensure that our own targets fully reflect our strengths and capabilities.
At home, we must meet our imminent Kyoto obligations in ways that do not undermine our economic and social progress. Also, we must prepare now for the successive and deeper cuts in emissions that have been signalled. This is where Ireland's Mr Micawber syndrome is doing real damage. No miracle has turned up.
Despite welcome reductions in the last two years, Government projections show us to be up to eight million tonnes a year above target for the five years the protocol runs. Bridging this gap will mean either reducing emissions or else purchasing allowances overseas to offset the overshoot. Reducing emissions in a modern, energy-efficient economy is difficult and expensive. Purchasing the necessary overseas allowances at the current CO2 price of €25 a tonne price could cost €1 billion. We have until June to inform the European Commission of how we propose to meet our Kyoto target.
Other EU states that are over their target have integrated strategies which spread reduction measures proportionally across sectors of society. These are underpinned by overseas government purchases. In Ireland, industry emitted 10 per cent of greenhouse gases, transport 17 per cent, agriculture 30 per cent, homes 10 per cent and energy production 25 per cent. A sensible approach would be to spread the burden proportionately. In Ireland the answer seems to be to hit industry.
Government has exclusively focused on the traded sector, responsible for one third of emissions, while ignoring the non-traded sector which accounts for the balance.
This makes neither economic nor environmental sense. The Government looks likely to hit 100 large industrial sites which are obliged to participate in emissions trading, a scheme designed to incentivise emission reductions. Trading began in 2005 with 15,000 other EU firms as a pilot phase until 2008 when international trading starts. Companies are given fewer allowances than needed and must choose between reducing emissions through efficiencies or buying allowances, if available.
Although it imposes significant costs, business supports the mechanism as it has the potential to achieve reductions at the least cost in a worldwide market for carbon. However, the non-involvement of the US, Australia, China, India and Brazil imposes a penalty on those firms based in countries that have ratified the protocol.
Those businesses that must trade internationally are profoundly concerned that the Irish State seems hell bent on placing the burden on the sectors that underpin our economic growth. Irish industry is modern, innovative and already a world leader in energy conservation. Where no scope exists to squeeze any more energy efficiency from industry, it makes no sense to impose burdens which will undermine our industrial policy, reduce competitiveness, stifle investment and further escalate the haemorrhage of manufacturing jobs.
It is possible to address climate change in a sustainable manner. To do so requires political realism and leadership to shape and implement a comprehensive policy framework that is fair, grounded on economic effectiveness and which recognises that tackling climate change involves every one of us. It must include education, awareness, incentives and supports. Renewables, alternative fuels, efficiency measures and forestry are just some of the many solutions that require a framework. Businesses, large and very small, have the expertise to unleash a wave of new green technologies. What they lack is any clear direction in the vacuum left by our outdated climate-change strategy.
It is of precious little help to the planet if industry is forced to leave Ireland, only to set up in a country that is not punishing its manufacturers in pursuit of a global goal.
A policy that puts this little island out of business is not a sound policy and misses the opportunity to address the issue.
The upcoming Cabinet decision on sectoral allocation is crunch time for Ireland.
Donal Buckley is head of environment policy at Ibec