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In the week leading up to the Budget 2020, the Government published the draft Climate Action and Low Carbon Development (Amendment) Bill, which aims to set Ireland on a legally binding path to climate neutrality by 2050, writes Michael Hayes, Russell Smyth and Shane O'Reilly of our Sustainable Futures practice. 

That the Government is progressing such a bold piece of legislation during the COVID-19 crisis, while securing cross party support, is quite remarkable and shows that the climate agenda is now firmly embedded within both Irish and EU institutions.  It also demonstrates that Ireland, previously as a laggard on this agenda, now taking a lead.

The national transition objective to a climate resilient and climate neutral economy is also in keeping with wider EU climate ambition and legislation to 2050.  The publication of the Bill a day after scientists from the EU Copernicus Climate Change Service revealed that globally September 2020 was the warmest on record, is a timely reminder of the ever-present impact of Climate Change on society.

The Bill aims to facilitate the implementation of the ambitious Programme for Government commitment to reduce overall greenhouse gas emissions over the next decade by c.7% per annum putting us on track to achieving net zero emissions by 2050.  Placing climate emissions reduction targets in legislation provides clarity as we transition to a lower carbon economy.

How our climate strategy is evolving

There is a sense of maturity in our climate ambition as we see the National Mitigation Plan being superseded with the National Long-Term Climate Strategy and the Climate Change Advisory Council being amended to the Climate Action Council within this Bill. Similarly, the Bill draws on recommendations of the cross section of Irish people who took part in the Citizens Assembly on Climate, as well the Joint Oireachtas Committee on Climate Action, reinforcing a more mature, inclusive stance when it comes to climate change.

The overall mechanism for delivering on our emissions targets to 2050 shall be via the introduction of a series of carbon budgets. These carbon budgets will be proposed to the Government by the Climate Action Council, in turn giving them increased strength as a body.  Starting in 2021, these carbon budgets are to run over five-year periods and shall be based on an economy wide approach running to 2035. These budgets may bank and carry forward any excess emissions to a future budget or may look to carry back emissions from a future budget (borrowing). In practical terms, for each relevant sector a decarbonisation range shall be set within the ceiling of the proposed carbon budget. 

Budgets beyond 2035 shall be set 10 years in advance, so as early as 2025 we shall be thinking of carbon budgets with a long-term lens which is in keeping with the impacts of climate change.  

At a local and regional level there is a key role for Local Authorities within the Bill. There is a request to develop local authority climate action plans which include both mitigation and adaption measures in line with national policy, plans and strategy while also recognising two or more local authorities can collaboration on regional based actions.

What does it mean for Irish businesses?

This bill, and its related measures, will undoubtedly have a significant impact on all Irish businesses over the coming decades.  Those which ignore the agenda will inevitably see increased costs from carbon taxes, regulation and changing customer trends, while business organisations such as IBEC and IFA have been cautiously supportive, recognising that change also create new opportunities as the landscape evolves and matures.

In addition to the carbon budgets set every five years and the National Long-Term Climate Strategy set at least every decade which cast a forward-looking expectation, there is provision within the Bill requiring an annual update to the Climate Action Plan. Originally published in 2019, the Climate Action Plan outlines a range of targets and measures across key sectors such as Electricity, Transport, Built Environment, Industry and Agriculture and gives good visibility of policy direction by sector. For example, changes in residential and commercial building standards will require significant innovation by the construction industry.  The phasing out of coal and oil heating methods will impact whole supply chains across the country, and importantly, the ongoing growth of Ireland’s agriculture sector will only continue if it can find a way of decoupling growth from increased carbon emissions. Furthermore, the concept of an emissions ceiling in any given sector, now introduced in the new Bill, could prove to be problematic for some but could also prove to be transformative and an incentive to act sooner rather than later.

There has been some commentary that the Bill did not go far enough in its ambition, particularly regarding the sale of fossil fuel cars beyond 2030. We understand the Government remains committed to such a plan but omission from the Bill at this point was necessary due to EU legislation requiring such a provision to be notified in advance. Not doing so could hold up other provisions of the Bill.  

Stay the course

Launching the Bill, Taoiseach Micheál Martin said the impact of our actions on the planet are undeniable, adding that 'climate change is happening and we must act'. For the key sectors listed in the Climate Action Plan there will be increased sectoral reporting requirements in the coming years in the form of emissions targets, strategies and action plans to meet carbon budgets. Within each sector there will be differing levels of maturity, ambition and technological innovation when it comes to climate strategy. 

There will be tough decisions required if we are to stay the course and meet National Long-Term Climate Strategy objectives as they are developed and ultimately climate neutrality by 2050. 

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