October 9th, 2019
The climate movement has seen a meteoric rise over the year, with the school strikes and Extinction Rebellion cranking up the pressure on politicians to bring in policy measures to tackle our runaway emissions.
Yesterday, Budget 2020 offered the first real opportunity for the Government to put its money where its mouth is after declaring a climate and biodiversity crisis earlier this year.
However, with the immediacy of the threat of Brexit, the attention of the Government was firmly placed on preparing a contingency plan should a no-deal scenario play out.
So, while prepared to go the extra €1.2bn mile to deal with the Brexit crisis, did Budget2020 also show the level of urgency required to deal with the climate and biodiversity emergency?
The Government announced a €6 increase in the carbon tax as a first step towards the €80 per tonne target set for 2030.
The increase – that comes into effect today – will see the price of a litre of petrol and diesel increase by 1.6c and 2c respectively. Increases on solid fuels for home heating will be held off until next May after the winter heating season (and after the general election cosily enough).
The reaction to the small increase in the tax has been widely negative, seen as ineffective and potentially counterproductive. The chair of the Climate Change Advisory Council, Professor John FitzGerald, called the increase “disappointing”, falling short of the €15 per tonne increase that the independent advisory body had calling for.
Leading environmental and climate coalitions said that the marginal increase in fuel price – roughly €36 per annum for a typical motorist – is too little to change behaviour yet enough to raise concern among the wider public already suspicious of the tax.
SIPTU agreed that the carbon tax increase is not sufficient to change behaviour, while also failing protect the vast majority of low and average income groups.
While many welcomed the move to ring-fence funds for a Just Transition, there was concern that not all of the revenue from the carbon tax was put aside for climate action.
Several environmental groups, as well as Codema, the Dublin Energy Agency, said that it is wrong that the €400 million raised per year from the existing €20 per tonne carbon tax will remain in the general exchequer fund.
Oisin Coghlan of the Friends of the Earth called, for the State to ensure that all revenue raised in the future is ring-fenced and for this to be “underpinned by legislation”.
“Households and businesses can’t make long-term spending and investment decisions based on one speech from a minister months before a General Election,” he added.
Just Transition funding
The €90 million that will be raised from the additional €6 per ton carbon tax increase in 2020 will be ring-fenced to fund the Just Transition and new climate action measures.
€20m will be dedicated to the creation of a new energy efficiency scheme targeted initially at social housing stock in the Midlands. A further €5m will be provided for peatland rehabilitation and a further €6m will go toward a Just Transition Fund.
In addition, a Just Transition Commissioner will soon be appointed to engage with all relevant stakeholders, including Bord na Móna, trade union relevant unions, the National Economic and Social Council and a local taskforce.
Catherine Devitt of Stop Climate Chaos said that it is crucial that the Government works fast to set up this system as there has been a significant delay in putting a Just Transition plan in place to date.
“[The Government] must also ensure that the new Just Transition Commissioner has the relevant authority and resources to ensure a process are put in place to ensure people’s livelihoods are protected going forward,” she said.
Notwithstanding the commitment to provide €31 million for the Midlands, SIPTU said that the Budget fails to deliver on level of funding needed for a real Just Transition.
Protection for lower-income families
The Government will use €21m from the carbon tax to put in certain safeguards for those in fuel poverty and increase the fuel allowance by €2 per week (a near 10 per cent increase).
The Government has also set aside additional funding of €13m for the Better Energy Warmer Homes Scheme to support those in fuel poverty. According to the Department of Climate Action, a total of €52.8m will be used in 2020 to retrofit the homes of people living in or at risk of energy poverty.
While Stop Climate Chaos tentatively welcomed the increase in fuel allowance due to lack of State preparation to protect those vulnerable to the change, Catherine Devitt questioned the long-term benefit of this model.
“It is questionable whether or not this top-up rebate will sufficiently tackle the scale of fuel poverty in Ireland, and a significant number of people in fuel poverty are not eligible for this allowance,” she said.
According to SIPTU, the increase in the means-tested fuel allowance will only affect one-in-three social protection recipients and does not extend to those in work.
The Society of St. Vincent de Paul also said that measures to offset the impact of carbon tax on low income households are “inadequate”. Many households, it said, will be left struggling with increased energy costs notwithstanding the increases in fuel allowance.
Many environmental and civil society groups outlined concern that Government has failed to heed the warning of charities and the ESRI that at least some revenue from the carbon tax needs to go back to the people of Ireland to protect low-income families.
The ESRI found that those on lower-incomes would benefit the most from a return of the tax via a combination of increase in tax credits, welfare payments and child benefit.
Green Party leader Eamon Ryan said that the Government missed the chance to increase the tax in a progressive way to “protect the vulnerable” through a tax and dividend approach.
Karen Ciesielski of the Environmental Pillar said that the a reformulated carbon tax that supports low-income households would be the” ideal Robin Hood tax”, bringing down emissions and also “warding off impending multimillion euro fines for missing our binding climate targets”.
“The Government needs to sit down with the Society of the Vincent De Paul and other stakeholders to discuss how those most affected by incremental carbon tax increases are protected and enabled to reduce their dependence on fossil fuels,” said Oisin Coghlan, Director of Friends of the Earth.
Those under the diesel rebate scheme, namely the haulage sector, were granted relief from increase the increase in the carbon tax, while agricultural diesel remains exempt from the tax. The CSO lists the diesel rebate scheme as an indirect potentially environmentally damaging subsidy.
The overall funding allotment for the Department of Climate Action and the Environment will be €770m in 2020. Over half of this funding will go toward the Department’s other remit, that of communications.
The Department of Heritage, which looks after biodiversity issues, will receive €354m in 2020. Again, the majority of spending will go toward its other remits in the arts, the Irish language and built heritage.
A total of €7m – including the revenue ring-fenced from the carbon tax – is earmarked for an “accelerated programme” of peatlands restoration and conservation work.
According to the Department of Heritage, this will result in 1,800 hectares (ha) of restored peatland in 2020, as well as generating 100 jobs in the Midlands. To put this in perspective, Bord na Mona has 80,000ha of peatlands, 30,000ha of which is available for restoration over next 20 years.
An extra €1m has been provided in funding to the chronically underfunded National Parks and Wildlife Service for conservation programmes and the hiring of staff. The total budget for the NPWS in 2019 is just under €14 million.
In comparison, €16 million will again be set aside this year for the greyhound racing industry despite animal welfare issues highlighted in an RTE Investigates expose earlier this year.
Minister of State Andrew Doyle defended the funding move, saying the industry could not implement reforms needed without state support. Combined funding for the Greyhound Racing Bord and Horse Racing Ireland this year is €84 million.
Public and active transport
There were several small measures to encourage the uptake of e-vehicles, including extension of the Benefit In Kind zero rate to 2022 and VRT reliefs to 2020, although supports are nowhere near the levels required to get us to our target of nearly one million electric cars on the road by 2030.
An extra €3m (€6m in total for 2020) will also be provided for electric vehicle infrastructure in a bid to double the very low number of council on-street charging points. This is in addition to €10m from the Climate Action Fund to support to development of the public charging network.
An extra €8m will be made available in grants for buying e-vehicles, bring the total funding for 2020 to €14m. A maximum grant of €5,000 will be available for individuals purchasing an electric car and €3,800 for businesses purchasing an electric van.
Critics warn, however, that there is an absence of bold measures to support public transport. The Department of Transport will be allocated an additional €357m in 2020 to provide resources to deliver the National Development Plan, criticised as too heavily focused on road infrastructure.
In 2020, funding will support the likes of the M20 Cork to Limerick scheme, road upgrades and several new road systems in the West of Ireland. The 2020 allotment, however, will also support BusConnects, MetroLink and the DART expansion programme, as well as the delivery of new longer trams on the Luas and a number of active travel infrastructure projects.
The Government also decided to replace the one per cent diesel surcharge introduced last year with an emissions-based charge on nitrogen oxide (NOx) emitted from passenger cars registering for the first time in the State from 1 January 2020. It is estimated that this will raise €25 million.
The move is seen as a way to move people away from diesel cars that, while emitting less CO2 than petrol, release higher levels of NOx and particulate matter that cause air pollution and health issues.
While the move was welcomed by environmentalists, many wanted an increase in the price of diesel to match petrol as a better way to make the public think twice before purchasing a diesel car.
Green Party transport spokesperson Patrick Costello said that the €9m allocated for greenways and urban cycling was “really pitiful” and sends a clear message that the Government has yet to grasp the value of cycling.
“To put this in context, Amsterdam has committed to a five year spend on cycling infrastructure of €354m. And if we were to put €9m into the roads budget it would get you just 300 meters of motorway,” he said.
The Irish Cycling Advocacy Network, Cyclist.ie, has asked for 10 per cent of all land transport capital investment to be allocated to cycling.
“Either the government is unaware that there is a climate emergency or else they are releasing the good news in bite sizes,” the group said following the release of the cycling support figures.