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The KPMG view

The Irish Government has published a draft of the Climate Action and Low Carbon Development Bill 2021. If ratified, this legislation would put Ireland on a similar footing to countries such as the UK, Sweden, France, Denmark, New Zealand and Japan who have enacted or are planning to enact legislation to reach Net Zero GHG emissions by 2050. Russell Smyth and Tomás Murray of our Sustainable Futures team outline the KPMG view of this development.

The Climate Action Bill delivers on one of the promises of the 2020 Programme for Government to put Ireland on track for a 51% reduction in emissions by 2030, and also delivers on the 2019 Climate Action Plan’s commitment to put Carbon Budgets in place and to increase the role of the Climate Advisory Council (“CCAC”).  That the draft bill so closely follows the original Programme for Government ambition, indicates the strong cross-party political alignment this agenda enjoys.

The suite of actions to meet this newer and steeper emissions reduction trajectory has yet to be seen, but this Bill is an important milestone putting Ireland’s ambition on a sound institutional footing and creating the governance platform to deliver on its now binding emission targets.

Enhanced role of the Climate Advisory Council

A key feature of the Bill has been the strengthening, expanded membership and expanded role of the CCAC, particularly its ability to propose the Carbon Budgets that will equate to a total reduction of 51% over the period to 2030, relative to a baseline of 2018.

In the past the CCAC has produced excellent analysis that highlighted the actions and challenges to achieving targets, but there wasn’t always a clear link between its recommendations and Government actions.

Hardwiring its role into the formulation of Carbon Budgets puts the reduction requirements under the spotlight – there is simply nowhere to hide. The proposed model is very similar to that fulfilled by the Climate Change Committee in the UK, which incidentally has just published its 6th Carbon Budget.

Cyclist and bicycle traffic light, with text overlaid: Our daily lives, from the transport we take, to the energy we use to heat our homes, to the way we grow the food we eat, will need to change forever.

Climate budgets and ministerial accountability

The Bill allows the CCAC to propose five-year Carbon Budgets to the Minister for the Environment, Climate and Communications, including sectoral targets on a rolling 15-year basis, starting in 2021.

Perhaps the two biggest features of the Carbon Budgets are that the delivery of the sectoral target emissions will fall under the purview and responsibility of the individual ministers responsible for each sector and the Carbon Budgets are to factor in all greenhouse gas emissions including biogenic methane emissions, bringing agriculture very much into the frame. Earlier in the Bill’s negotiations it had been mooted that a separate, perhaps softer emissions trajectory for agriculture would be considered given its importance to the Irish economy, but this isn’t now the case.

Accountability of individual ministers will make for interesting discussions around the cabinet table as overall national targets are carved into sectoral reductions with responsibility for their delivery being passed to individual departments and the trajectories for different sectors being set by Government.

What this means for Ireland

Many countries have proclaimed an ambition to achieve Net Zero. Putting these ambitions on a legislative footing puts Ireland amongst a select few; enshrining a 51% reduction by 2030 in national law demonstrations international leadership. If these legal obligations are met, the implications for Irish society will be wide and far-reaching. Our daily lives, from the transport we take, to the energy we use to heat our homes, to the way we grow the food we eat, will need to change forever.

It is hard to envisage changes of this magnitude being implemented without there being some losers, but there are also opportunities and the collective benefits are clear. Thoughtful and unwavering implementation of upcoming Carbon Budgets give Ireland, its businesses and its citizens the opportunity to be differentiated in a very positive way on the major issue of our time. It’s amazing how far Ireland has come on this agenda in just a few short years.

Get in touch

The Climate Action Bill will have implications across Irish business. If you have any related queries, contact Russell Smyth or Tomás Murray of our Sustainable Futures team. We'd be delighted to hear from you.

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