Targets to cut greenhouse gas emissions and boost the use of renewable energy in an EU plan to be published today could cost Ireland as much as €1 billion per year.
The climate change strategy will also result in increases in electricity and fuel prices for consumers, although the European Commission argues that not taking action would cost more in the long term, according to an impact assessment carried out by EU officials.
The commission estimates its strategy to curb CO2 emissions will cost €60 billion per year across the EU. This works out at an average of 0.5 per cent of EU gross domestic product (GDP), with Ireland facing an annual bill of about €950 million until 2020.
The cost of the strategy, which should cut EU emissions by 20 per cent by 2020, will be shared by consumers and businesses.
But the commission argues that taking no action could increase costs to 5-20 per cent of GDP by 2020 because of climate change and higher oil and gas prices. The union will also benefit from being less reliant on oil and gas imports and should save up to €50 billion in fossil fuel costs.
Under the EU plan the Government will be told to cut greenhouse gas emissions by up to 20 per cent by 2020, compared with the level of emissions generated in 2005. It will also have to generate 16 per cent of its energy needs from renewable energy, a significant increase on the 2 per cent currently produced.
Ireland faces among the toughest targets under an EU burden-sharing agreement that is designed to ensure that the richest member states bear the brunt.
Minister for Finance Brian Cowen, who was in Brussels yesterday at an EU finance ministers’ meeting, said it was important that the commission proposal on climate change was a fair and transparent outcome for all states. He admitted it was a “very challenging agenda”.
“It is not simply about certain tax issues or proposals, it is about a change of lifestyle by all citizens. A contribution must be made by everyone in terms of our lifestyle quite apart from what government can achieve,” said Mr Cowen, who insisted that there were no divisions between Fianna Fáil and the Greens on the EU proposals.
Meanwhile, the commission watered down elements of its strategy yesterday in an attempt to ensure that energy-intensive businesses do not simply relocate overseas to states such as China and India to avoid the tough emissions cuts. It has agreed to give energy-efficient industries such as cement, steel and aluminium companies more time before they have to purchase permits from governments to enable them to emit CO2.
By Jamie Smyth
23 January 2008
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