6 ways the Government's Climate Action Plan could affect your pocket
Conor Dever
Staff Writer

While we're glad to see the Government take some action on the environment, what will it cost consumers?

After the recent European and local elections, there was talk about a Green Wave and our own Taoiseach put it down to his party's inaction on climate change. While this mightn’t have been entirely accurate it is still nice to see the Government setting more meaningful goals around the issue.

Knee-jerk as it may have been, the plan itself seems quite comprehensive but how much of it comes to fruition is yet to be seen. Under the EU 2020 climate and energy package, Ireland has pledged to decrease its emissions by 20%, yet we are on course at present for a reduction of just 1%. So these new plans, which still have to be voted on in the house of the Oireachtas, might not mean much if we don’t follow through on them.

If we are to meet our climate change targets, everyone will have to play their part. But one thing we were particularly worried about was whether the Government would simply try and tax its way out of this problem, in the way it has tried to with others e.g. the sugar tax.

So let’s look at some of the main proposals in the Government's Climate Action Plan and how they could affect your wallet.

Selling solar power - positive

It looks as if the Government wants to reward early adopters of environmental tech and one way it plans to do that is to allow those who have excess amounts of energy coming from solar panels to sell it back into the grid.

That means if you have installed solar panels and have more energy than your home needs, you might be able to make a buck giving it back to the Government. This is definitely a positive considering the money and emissions you will save by generating your own electricity.

According to some sources, payouts of up to €400 could be possible. 

Transitioning to electric cars - negative and positive

One of the many headlines you've probably heard about in the report is that the Government is making a concerted effort to get motorists to transition to electric vehicles. This is a good thing for the environment certainly as the vast majority of emissions from transport comes from road traffic.

Financially this could be positive or negative.

While the Government has initially promised to vastly increase the number of charging points in the country there are other tools it will apply to help incentivise you to make the switch. For one it will look at reducing the VRT and road tax on electric vehicles to encourage greater take up.

On the flip side, it will increase tax on petrol and diesel as well as applying higher rates of VRT and road tax to non-electric cars.

So if you buy an electric car sooner rather than later you could save hugely on both fuel costs and tax for years.

However if, and when, everyone has made the transition to electric cars, it remains to be seen if the Government will continue to tax them so lightly. 

Public transport - potentially negative

Any town/city with a population above 70,000 will next year have to present plans to transition their public transport systems to more carbon-neutral alternatives. This will include electric buses, trains and cycle lanes.

This sounds fantastic in theory. Ireland’s public transport system is way below European standards, so we're desperately in need of investment in that department.

However, Dublin currently has the second highest cost of public transport in the world, due largely to a lack of Government subsidies, and if the cost of the decarbonisation of public transport is passed on to consumers it could have dire consequences for commuting costs.

Forestry and beef - positive

Ireland’s number one cause of carbon emissions is agriculture, accounting for one third, and the vast majority of this comes from cows.

Even after this report, the Government has no concrete plans to curb growth here. In fact according to a report by the Environmental Protection Agency, beef herd numbers are projected to remain steady until 2030 with the dairy herd increasing by over one fifth. This means that emissions from the agriculture sector will increase.

The Government does have an idea on how to try offset emissions and that is through forestry and carbon sinks. This means it wants to increase the number of trees that are planted across the country in the hopes it will offset the increase in emissions.

Forestry may be incentivised for farmers and people who own land may get some form of financial reimbursement for planting trees on their property. The exact form this might take won't be known until after the Oireachtas vote.

When it comes to beef farming, this is where the Government's plans are the most opaque. When you consider the fact that the majority of our emissions come from agriculture, the majority of which comes from cows, it might seem strange that herd numbers are forecast to increase over the coming years. This is no doubt partly due to the political influence of farmers and an unwillingness to take them on, especially with a general election on the horizon once Brexit has passed! 

The plus for consumers though is that with the supply of Irish beef projected to continue to increase, beef prices - and indeed dairy - should remain stable if not decrease here. So anyone for a burger?

Single-use plastics - negative

Another levy which might be introduced after the publishing of this plan is one on single-use plastics. Ireland has a track record here as you know as we introduced a levy on plastic bags back in the early 2000s

How much it will be and what the alternatives will be remain to be seen but a ban on single-use plastics is in line with EU protocols which were announced last year.

Just to jog your memory, the EU will ban 10 types of single-use plastics by 2021 such as straws and balloon sticks, which are the most commonly found items on EU beaches.

Dealing with the remaining types of single-use plastics will be left up to the discretion of each member state's government. So anything that isn't in that top 10 could be subject to a levy. Great for the environment of course but maybe not for your pocket. 

Carbon tax - negative

Finally, the one you have all been waiting for, the carbon tax. It looks like the Government is certainly going to increase the carbon tax from €20 per tonne of CO2 to €80 per tonne in 2030. This will be done on a gradual basis, increasing in increments annually until 2030.

So this means that it will steadily increase every year for the next 11 budgets. What is still unclear is whether there will be some sort of credit recycling for those in the lowest income brackets as was recommended by the ESRI recently. What we also saw in that report was that the carbon tax in its current form hits those who earn the least the hardest. This is despite the fact those in the highest income brackets contribute most to emissions.

The carbon tax currently adds around €46.20 to your annual natural gas bill and 5 cents to every litre of petrol and diesel. A rise from €20 to €80 would add an additional €140 or so to your annual gas bill and another 15 cents or so to a litre of petrol and diesel.  

What do you think?

Are you happy with the plan? Does it go far enough or does it go too far? Get in touch and let us know!

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