Climate policy after the budget

The budget introduced a carbon tax, with immediate effect on transport fuels, after the winter on some heating fuels, and after due deliberation on other heating fuels. I’ve long argued for a carbon tax. I would have set the carbon tax 67 cents lower at €14.33/tCO2. Like the government, I would have ignored the advice of the Commission on Taxation and levy the tax at the point of retail.

I would not have exempted coal and peat. I do not think that direct imports from the North would be substantial. Coal and peat emit more carbon dioxide, per unit of heat, than any other fuel. Coal and peat should be taxed most, not least.

At the same time, the government has increased the budget of its energy programmes by 13% to €105 mln. The SEI has yet to release its long-finished evaluation of the performance of these programmes in the past. With a carbon tax in place, there now is double regulation. The carbon tax induces people to invest in emission reduction, and they will get a government subsidy on top if they use the government-favoured technology. The Climate Bill is rumoured to put a domestic cap-and-trade system on top.

People who have had their homes insulated at the taxpayers’ expense will continue to be entitled to a fuel allowance (which may well go up).

The carbon budget had some bad news. According to the provisional estimates of the EPA, emissions in 2008 fell by 1% compared to 2007. The ESRI forecast for 2008 is -4%. The EPA has not released their estimates, so I am not sure what is going on. If emissions do not fall in the middle of a recession, that must mean that energy use is sticky downwards (unlike wages). This will make emission reduction even harder than we thought.

Despite that, the Climate Bill is rumoured to extent the target of a 3% annual emission reduction from 2012 to 2020, and to have an 80% emission reduction by 2050. A future government can of course pick a new target.

Returning to the budget, energy research will see its funding increase by 176%.

37 replies on “Climate policy after the budget”

@Richard Tol

“The carbon budget had some BAD news. According to the provisional estimates of the EPA, emissions in 2008 fell by 1% compared to 2007. The ESRI forecast for 2008 is -4%. The EPA has not released their estimates, so I am not sure what is going on. If emissions do not fall in the middle of a recession, that must mean that energy use is sticky downwards (unlike wages). This will make emission reduction even harder than we thought.”

I am not criticising this statement, just a little puzzled by it? Why are you sayings that it is bad news that emissions fell by 1% in 2008 and are forecast to fall by 4% in 2009? Is it because, given that the economy contracted by more than 1% in 2008 and by more than 4% in 2009, then you’d have expected emissions also to have fallen by more than 1% in 2008 and by more than 4% in 2009? If that is the reason, then I can see why you think it is bad news. However, for an explanation one would need to look at the type of recession Ireland has experienced and also at Ireland’s demographics.

As I have pointed out innumerable times here, one of the features of the recession in Ireland is that manufacturing output has held up remarkably well. In most EU countries, manufacturing output had fallen by 20 to 25 per cent by the first half of 2009, although it is starting to recover slightly. In contrast, in Ireland manufacturing output hardly fell at all during the recession. As manufacturing industry uses a disproportionate amount of energy, say in comparison with retailing, could this be one of the reasons that emissions in Ireland have fallen by less than what you’d expect from the 10 per cent fall in GDP? In addition, despite what Morgan Kelly claims, the number of households in Ireland has continued to rise right through the recession. ESRI themselves estimated in their Quarterly Bulletin of 2008 Q4 that the number of households was still increasing by about 50,000 annually. Obviously all these additional households would have to use energy for heating and cooking, even if economic activity has contracted. So, maybe these two factors combined explain why the fall in emissions has been much less than the fall in GDP?

I have some possible further bad news. At least its bad news for those worried about emissions, although it might be considered good news for those, like myself, eagerly looking forward to a resumption of economic growth. I wrote a very simple computer program to measure electricity demand in Ireland, taking the data from the Eirgrid website. It is a very crude program, so I claim no great shakes for it. But, it does seasonally- adjust and temperature-adjust the data. What it shows is that electricity demand fell by about 7 per cent between August/September 2008 and March/April 2009, reflecting the fall in economic activity. This would certainly have contributed to a fall in Ireland’s emissions. However, it then stopped falling between March/April 2009 and August/September 2009, and since August/September 2009 it has been rising slowly again. As I said, my program seasonally-adjusts and temperature-adjusts the data, so it is not simply that electricity demand is starting to rise as we head into Winter. Electricity demand is still well below the corresponding months of 2008, partly because of the recession and partly because the months from September to December have been much milder this year than in 2008. However, if my simple computer program is accurate, then electricity demand in Ireland should be showing year-on-year increases by March or April 2010. So, you might be even more disappointed in the figures for emissions next year.


The emission reduction targets to be included in the Climate Bill are more than rumoured. They are covered in the Framework for a Climate Change Bill which was also published yesterday, and which can be downloaded from,21824,en.pdf

The 2010 Carbon Budget can also be downloaded from the DOEHLG website and it includes the provisional EPA estimates for 2008.,21823,en.pdf

This throws some light on why emissions did not fall further in 2008 despite the onset of recession. Much of the blame is thrown on the colder w inter in 2008 compared to 2007. The document also outlines some changes in the accounting methodologies used to define our inventories. Nonetheless, the overall downward trend is much less than required to help us meet our Kyoto commitments for the 2008-2012 period. The document notes:

“It is clear that even with substantial downwards revisions of historical data, a substantial challenge is still evident in the non-ETS sector. To avoid purchases of emissions permits to achieve compliance, emissions need to fall to an average of 40.556 Mt over the five years, 2008-2012. In the first of these five years emissions in these sectors totalled 44.956 Mt, a full 4.4 Mt above the target.”

The document continues

“2008 is the first year of the Kyoto compliance period and while the figures are disappointing, emissions are expected to decrease in 2009 and possibly bottom out in 2010. However, a clear picture of the effects of the recession will not be manifest until the first quarter of next year when the EPA complete their next round of emissions projections analysis.”

In this context, it is sobering to note that the carbon tax is estimated to reduce emissions in the non-traded sectors of the economy “by just 750,000 tonnes between now and the end of 2012. This will result in an average reduction of 150,000 tonnes per annum between 2008 and 2012 or 250,000 tonnes in a full year” [I don’t understand the difference between the 150,000 and 250,000 figures as the former is estimated over the 5 year period].

Part of the explanation for its limited effectiveness is the exclusion of coal and peat from the tax, which limits its effectiveness in reducing CO2 emission. Part of the explanation is that CO2 only accounts for two-thirds of all emissions, and because the ETS sector only applies to CO2 emissions, an even lower proportion of emissions in the non-ETS sector. As yet there is no real strategy on how to reduce methane and nitrous oxide and the fluorocarbon emissions, although the government notes that it is funding considerable research into developing reduction strategies for these gases (a high proportion of which originate in the agricultural sector). And no doubt part of the explanation is low behavioural responses to changes in the price of energy in the transport and residential sectors.

Why are politicians so keen to tout Carbon Tax as something new? We have excise duty on petrol and this tax like much else in the budget will hit the lower income earners in society. Who do the Green Party think are the commuters who do not have the luxury of the Dart or convenience of cycling to work? The N3 & M50 slow suffle each morning is an outcome of the appalling planning and development fostered by the current members of goverment and it is shocking that they now try to soak more tax from these hard pressed young workers by giving it a green spin.

All numbers, including the ESRI forecast, are for 2008. The bad news comes in two parts. If a good recession cannot reduce emissions, what can? The ESRI model is often criticised for its muted response of emissions to signals. If the 2008 numbers are true, than our model responds too much, rather than too little.

If the preliminary 2008 numbers hold up, then emission reduction has become a lot harder.


The “cold winter” explanation is not right. Residential emission are only 10% of total emissions.

It’s amazing that industrial and commercial energy use have kept up so well. It’s amazing that transport has not fallen further.

The EPA data are, by the way, consistent with the SEI data.


The carbon tax should equal the futures price of CO2 permits on budget day, so that CO2 emissions from transport , heating, cement production, and power generation are treated the same. The futures price was €14.33/tCO2.


I know your arguments against double regulation, but I wonder can it be justified in the case of the residential sector? The residential sector is a source of CO2 emissions because it burns fossil fuel energy for space and water heating and for cooking. The only options to address this are higher building standards for new housing and (because we won’t have too many of those in the next few years) retrofitting of the existing housing stock.

The recent McKinsey Report for the SEI considered two ‘levels’ of retrofitting – Level 1 consists of attic and wall insulation and double glazing, while Level 2 involves bringing buildings to ‘passive house’ standards, which implies a very low but not zero thermal energy demand (40kWh per square metre of floor area, compared to 96 KWh in the 2008 building standards). Level 1 has a negative marginal social cost, that is, investment in retrofitting can pay for itself assuming a social cost of capital of 4% per annum. McKinsey recognise that the CBA would be less favourable from the decisionmaker’s (householders’) point of view but although the figure may be in the report I could not find it (its a lengthy document!).

Given the failure of households to invest in energy-saving measures in their homes (either because their cost of capital exceeds the social cost, because their time horizon is too short, because the benefits accrue to agents other than those undertaking the investment, or because of lack of information), is there not a separate case for the government’s retrofitting subsidy to push householders’ behaviour in the optimal direction?

Of course, the pushing could also be done by way of a stick rather than a carrot. Here the proposed property tax could offer an opportunity. At the moment, it seems the tax will be levied on a site value basis, once the valuation process is completed. Analogous to the emissions-linked motor vehicle tax, would it make sense to link the property tax to a building’s energy efficiency, with the rate doubled (or whatever) for the least energy efficient houses and halved for the most energy efficient? I accept that, at least temporarily, this would increase the implicit carbon tax the least energy-efficient households would pay above the socially optimal level, but it may have a greater signalling effect than the extra imposition on the price of heating oil or natural gas.

Further to the 2010 Carbon Budget, I would be interested to hear views on the feasibility of meeting the Kyoto Protocol target of 62.84 mtCO2eq on average over the period 2008-12 in light of the emissions figures presented by the Minister.

Gross emissions are now forecast at 63.93 mtCO2eq for the five year period. The budget shows forest sink reductions of 2.24 mtCO2eq, leaving net emissions at 61.63 mtCO2eq, apparently comfortably below the KP target.

However, although the KP does allow for the inclusion of activities related to land-use, land-change and forestry (LULUCF) in emission inventories, I understood this was not accepted by the EU when setting its own binding national ceilings. It was agreed by the EU Parliament and Council in December 2008 that, in the event that an international agreement on global reductions is not reached, Member States may include emissions and removals from LULUCF towards meeting the 20% reduction target (relative to 1990). The aim is that this proposal would enter into force from 2013 onwards, so it would seem to be the gross emissions figure which is relevant for Kyoto Protocol purposes. However, the government appears to using the net emissions figure to compare with the KP target, and I would appreciate some explanation of this.

Incidentally, a strict reading of this condition would seem to suggest that, if there is an agreement in Copenhagen this week, this would not only increase the severity of the 2020 emissions target we would have to meet (as it would trigger the EU’s commitment to a 30% reduction over 1990 levels rather than the current 20% target) but also it would exclude the use of forest sinks in meeting this more ambitious target. The EPA, in its Greenhouse Gas Projections for 2008-2020 published earlier this year, noted that “The inclusion of carbon sinks in emissions accounting post-Kyoto are critically important for Ireland and will play a significant role in bringing Ireland closer to its 2020 target for non-ETS sector emissions.”

However, back to the KP targets for 2008-12. The ‘distance from target’ shown in the 2010 Carbon Budget amounts to 1.1 mtCO2eq per annum. This represents the extent to which the government will need to make use of the flexibility mechanisms in the KP to purchase emission reductions elsewhere. The amount is much less than the figures set out in the National Climate Change Strategy and even less than in the EPA projections in March of this year, which should be good news. However, the Carbon Budget itself strikes a more pessimistic note:

“It is clear that even with substantial downwards revisions of historical data, a substantial challenge is still evident in the non-ETS sector. To avoid purchases of emissions permits to achieve compliance, emissions need to fall to an average of 40.556 Mt over the five years, 2008-2012. In the first of these five years emissions in these sectors totalled 44.956 Mt, a full 4.4 Mt above the target. In the ETS sector emissions totalled 20.382 Mt, only 0.41 Mt above the amount allocated to existing installations, and approximately 1.9 Mt below the total allowable allocation.”

I am puzzled by this statement because, although there is a division between the ETS and the non-ETS sectors in terms of regulation, I am not aware that there are separate targets for the two sectors for this first KP period. The statement is right to highlight the challenge of non-ETS reductions for the post-2012 period, when we will have annual targets to meet on the path to 2020, but I can’t see why the split is relevant to the 2008-2012 period, and would be grateful for some explanation.

If the aggregate 1.1 mtCO2eq figure is the appropriate one, then it is interesting to read the NTMA’s Carbon Fund report for 2008 which details in activities in managing the Carbon Fund. It expects investments made to date in three carbon funds to yield 3 million Kyoto Units in 2008-2012, and in addition it has purchased 6.15 million CERs, or a total of over 9 million units. It would thus seem we have more than enough units in hand to cover the expected overshoot of our Kyoto target for 2008-12, and indeed may be in a position to sell back some of these units towards the end of the period. Is this the case?

This is not just double regulation. The government is picking winners. Picking winners is always suspect. In this case, we know that McKinsey used an outdated and incorrect methodology. We know that the McKinsey’s application to Ireland has yet to be submitted for peer-review. We know that has done an evaluation of its past and current subsidies but has yet to release the results.

If the government must pick a winner, then it should do so on the best available knowledge.

The distance to the Kyoto target can always be made good by purchasing emission permits/credits from abroad. The ESRI projections of last year suggested that the NTMA had bought enough. I’m not so sure after the revision of the statistics and preliminary numbers.

Note that the NTMA is only allowed to buy permits. If it buys too many, it cannot sell the surplus. (Or indeed, if the highly capable and well-paid trader spots an opportunity for arbitrage, he will have to ignore it.)

The difference between the 20% and 30% target will be met by emission reduction outside the EU.

re transport emissions check out he energy balances on Road transport emissions did fall broadly in line with your forecast, the residual category increased.

The EPA and SEI numbers are indeed consistent with one another (as one would expect knowing the procedure).

Total liquid fuel use in transport fell by 1.9% according to the SEI. That is surprisingly little.


I have been on to Amazon and all textbooks with that in their title are on meteorology. I studied meteorology at college.

Tony Allwright made specific claims, all I am asking you is to prove they are wrong. You are the one who said he is wrong. Surely that is not so difficut.

After all the taxpayers of the Western World are being asked to invest Trillions of Euros, so the underlying science must surely be proven beyond all reasonable doubt.

As per Frank earlier, why do we pay petrol taxes at the current level? Would anyone care to suggest a fair rate of petrol tax? The UK’s Tim Worstall feels they are paying 12p/litre too much and that the optimal tax could be half their current rate (an unreferenced point in comments).

Do Ireland’s AA not argue that motoring taxes are far too high.

I appreciate it is not quite related to the original post but it rarely seems to get discussed and I thought Richard, this might be somewhere that you could advise.

I am amazed at this conversation. So much science and so little humanity. One comment that the carbon tax will hit the least able to pay is ignored in your commentary.

The government grants are only available to those with the initial capital to take advantage, who will generally have more energy efficient homes in any case – if only for their own comfort. Similarly they will drive more efficient (modern) cars. The more hard pressed will have neither the option of upgrading their car nor of changing their commuting behaviour.

Why can we not look at supply? The Germans have a high percentage of solar powered energy because they have subsidised its cost. This has led to large private investment and high take up by the consumer. And people don’t feel browbeaten by zealots. Why are green economics so wedded to right wing ideology?


If the carbon tax is designed to induce people to reduce their use of fossil fuels, rather than to raise funds, it makes sense that it hurts the less well-off more, as they have the most to gain from reducing their consumption.

Ideally, the carbon tax would be allied with strong tax incentives to fit poor people’s houses out with energy-saving insulation etc.


The Irish government has a strong supply policy as well. Ireland will shatter world records on wind penetration and dreams of wave power.

The German record on solar power is not unblemished, by the way. The cost is high (but hidden) and the efficacy is doubtful as the main impact seems to have been a shift in solar from Southern Europe (where there’s sun) to Germany (where there’s little).

@ Rafa

Of the 130 million for retrofitting houses, 76 million will be used for social housing under two schemes (40 million DoE and 36 million DCENR). In addition fuel benefits will be increased to off-set the fuel poverty implications of the carbon tax introduction. This is a massive increase in funding and entirely appropriate as this sector does not have the private capital to take advantage of grant aided scheme.

@ Richard

Only half of increase fro -20 to -30% could be met outside the EU as far as I remember. Rest must come from domestic efforts.

@ Alan

I am as confused by you as division into ETS/non-ETS in pre 2013 period. The net figure is the one for Kyoto period BTW- ie: sinks are permitted.

30% target will only be triggered if ‘comparable” commitments are made by other developing countries. -17% on 2005 (Waxman-Markey) probably does not fit the bill.

On RTEs News at One today, Minister Gormley reported from Copenhagen on the need to prevent a “runaway greenhouse effect”. A runaway greenhouse effect is present on the planet Venus. Apocalyse fatigue has apparently reached such an advanced stage, that the interviewer did not bother to query the Minister further on this matter.

I was unaware that any serious science indicated the possibility of a “runaway greenhouse effect” until now. Remarkably, this new result emerged during the High Level Segment (Heads of State and Ministers) of the conference, rather than an expert segment.

It seems to me that a Carbon Tax of €15/tCO2 is now far too low, whatever the EU ETS market says. Minimum €1,500/tCO2 to offset the imminent threat of extinction.


Thanks, you are right that it is net emissions, i.e. after forest sinks are deducted, which are relevant for the Kyoto first commitment period. This is actually made clear in Annex 1 of the National Climate Change Strategy but I was confused by the reference to LULUCF in the 2008 EU effort-sharing directive.

“Carbon tax is a good idea edxcept that it is designed to become a means of making money via trading.”
“If the carbon tax is designed to induce people to reduce their use of fossil fuels, rather than to raise funds, it makes sense that it hurts the less well-off more, as they have the most to gain from reducing their consumption.”
If either or both of these observations. made in the commentary, are accurate then I see my cynicism about the attempts to give moral legitimacy for this carbon tax is vindicated. I await with trepidation to read the rationalisation of taxation on water consumption.

@ All,

Richard, I will only say this once here, because it deals as much with politics as economics, and it deals with something particular to the ‘Irish’ culture and system in a not very good way. I am not sure whether you will immediately understand it or not. I haven’t yet gone through the comments above, but I hope to study the discussion above in the near future. But I want to say this out straight. It may help to frame debate and cut to the chase a bit.

In Ireland we have always had a problem. We are not sure really, if a certain proportion of society ‘live off the system’ to an over extent. You don’t hear that much about it today somehow, but when I was growing up in poorer times in Ireland, it was a hot topic. Did some people deserve hand outs from the state etc, etc.

Anyhow, that was a different sort of Ireland in the late 1980s when I grew up. There was nothing on the horizon which remotely resembled global warming. Although, I for one did take a general concern in matters to do with the environment. I had never heard of anything called a ‘green party’ at that time.

I grew up on Frank McDonald essays that were published at the end of each week in the Irish Times newspaper. Though the Irish Times was in quite limited circulation in my particular remote corner of west Limerick, there was a large-ish village not too far away and we could buy the IT in the supermarket there. McDonald introduced me to a world that people didn’t talk about much where I came from. I think nearly 9 boys out of my class of 10 boys at National school were sons of small farmers. I was the odd man out as my old man was a civil servant. So perhaps it was fitting that I should become the out-of-sync, middle class environmentalist in my class.

Anyhow, I just insert that last paragraph as an aside. Bear in mind, that many young teenagers like myself are reading McDonald’s articles in the Irish Times these days and google-ing his articles on their computers, for their school essays. Without McDonald’s journalism, I don’t know what my young teenage years would have been like. The fact only occured to me the other day, that I had bought the Irish Times as a kid for the purpose outlined above. Funny the things your mind brushes aside. The fact is, I am older now and I think Frank is a bit full of it. But credit where it is due, he did set me on the right track.

But back to welfare recipients and saving the environment. The simple fact of the matter is, for years and years in my childhood the debate simply focussed on the ‘down-trodden’ in society. How we could help them out and so forth. Whether they deserved it or not. But imagine this scene for a moment.

It is the doctor’s waiting room and there are two patients sitting together. One is a member of society like I was describing, who expects assistance from government, but they were dealt the wrong cards in life. Thats fair enough. But sitting next to that patient is the ‘world’.

Guess what? The world has a hole in it’s atmosphere, try and compete with that!

My point being, during my childhood there was a segment of Irish society that had little going for them – except maybe, they were the bottom of the bucket and received pretty much the lion’s share of attention and sympathy from the ‘system’. Nowadays, things have changed and there is an even sick-er patient of gigantic size who is the focus of most of the concern – the world.

My point being, as long as the lower tier of society were the sick-est patient they command the attention. Now they have to compete, and perhaps even get off their bums and work to pay ‘carbon’ taxes to try and pay for medication for this over-sized football. That is a sea change for some people in society today. Some of the opposition I hear in daily conversation against carbon taxes comes from a direction of folk who knew how to work the system for many a long day.

However, that is not to say you cannot be broke, un-employed and without prospects, but still be in support of a cleaner environment. On the contrary.


I have now learned the importance of the distinction between ETS and non-ETS emissions in calculating the ‘distance to target’ over the 2008-2012 period. When permits were allocated to the ETS sector, they could either be used to offset emissions or, if not required, they could be sold by the recipients. Thus, when the Commission comes to calculate compliance by Ireland, it is not the actual emissions in the ETS sector which will be counted, but rather the volume of permits issued (some of the allocation was held back for New Entrants; I am still not sure what happens to that tranche and whether it will be available to the government to offset against non-ETS sector emissions or not – this is the difference between the figures for the amount allocated to existing installations and the total allowable allocation in the quote from the Carbon Budget above).

This explains why it is relevant to examine what is happening in the non-ETS sector separate from the ETS sector, and explains the pessimistic note sounded in the Carbon Budget.


Further to my last comment, it is possible to work out from the Carbon Budget statement that the government is working on the basis that the Commission will assume, for compliance purposes, that the ETS sector emits the full allowable allocation which is 22.284 mtCO2eq. The overall Kyoto target is 62.84 mtCO2eq, and the non-ETS target is 40.556 mtCO2eq. Thus the assumed emissions from the ETS sector must be 22.284 mtCO2eq. This corresponds to the actual emissions in 2008 of 20.382 mtCO2eq plus the 1.9 mtCO2eq which is the gap from the total allowable allocation as reported in the quote from the Carbon Budget above.

@ Alan

Thanks – a satisfactory explanation. This is a similar problem encountered within the context of adopting a national target by way of climate change legislation – how to deal with the ETS sector? The only way out is to do as you outline above – assume the allocation is the contribution of that sector. Otherwise you double count reductions that may occur elsewhere in the EU.


Yes, this is true for the 2008-2012 period but it would only be true in the post-2012 system if it still involved national allocations to the ETS sector, but it doesn’t. In the new scheme, each ETS installation will be participating in an EU-wide scheme, and the Irish Government will therefore have no role in determining its allocation. This makes the idea of a national target whether included in a climate change bill or not somewhat irrelevant.

“If the carbon tax is designed to induce people to reduce their use of fossil fuels, rather than to raise funds, it makes sense that it hurts the less well-off more, as they have the most to gain from reducing their consumption.”

Apologies for the post (just made) that was meant to introduce my comment.
to Dave.
The sentence I quote from you seems to misunderstand that for those in a financially compromised position there is no room to take advantage of the opportunity to “reduce their consumption”. In all circumstances we can benefit from reduced consumption, in so far as we save money. But we need to travel to work, we need to heat our homes. These are not luxuries we choose to consume. Therefore demand is inelastic. Petrol prices have fluctuated wildly over the last couple of years. I don’t think there have been equally wild fluctuations in demand.
Similarly home heating oil. I do not believe that people recklessly turn up the thermostat when the price comes down, and similarly, short of driving people towards destitiution, higher prices will not reduce consumption beyond a certain point.
Many of the people in this circumstance will not be in social housing nor in receipt of benefits. Neither will they be able to fund improvements in their home – dspite the benefit they would gain.

I think many of these arguments – as to the inelastic nature of much consumption – are valid in all economic circumstances, but they are surely much more so in this deep depression we find ourselves in.
I heartily welcome the aid to incentivise home improvements. It should have been there a long time ago. But Bord Gais and Airtricity undercutting EBS by 10%+ showed how to change consumption patterns.

Set a low flat fare for all Dublin bus journeys, and you would acheive more than a rise in petrol prices. Make public transport convenient, integrated and efficient and you would offer a real alternative to the car.
Failing that – and providing public transport in a disastrously unplanned LA sprawl like Dublin is likely tofail – then argue for stringent targets for the car industry at the EU level.

The main thing is to take a positive approach rather than the big stick. Taxes and charges have their place, but it should not be central.

@ Alan

The fact is that many member states do have national targets (ETS + domestic) and in the case of the UK this is now legally binding (-34% on 1990 by 2020). This is politically important as the UK is able to say: we, as a country, have a very ambitious target, the most ambitious among developed economies.

This is important for Ireland because further to the Climate Bill, we will have a legally binding target for the whole economy also. The question then arises: what to be done about the ETS sector; how to calculate emissions? Actual emissions figures can’t be used as this would risk double counting. The UK have thus decided to use the allocation as the figure used to calculate progress on their national target. Ireland will also take this approach. It’s not a perfect solution as the territorial emissions may not have been reduced, but this is far from irrelevant, it is in fact a key issue within context of current Bill.

DECC in UK, with whom I have had discussions on this, are currently considering how they will approach this issue in post-2012, but are likely to use current approach.


“The UK have thus decided to use the allocation as the figure used to calculate progress on their national target. Ireland will also take this approach.”

My point is that, after 2012, there will be no national allocation, so this cannot be a viable approach.

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