Tackling the greatest challenge of our time

Nov 01, 2019
The effect of the carbon tax will be limited, but with enough will and focus, we can still prevent climate catastrophe in the next ten years, writes Lorraine McCann.

“Climate change is, without doubt, the defining challenge of our generation.” This was the opening line of the Finance Minister’s speech on climate change in Budget 2020. The need to decouple economic growth from environmental degradation was reinforced from the outset, but did Minister Donohoe match this level of concern in budget funding? The simple answer is no. €90 million of revenue from the €6 per tonne increase in the carbon tax will be ring-fenced for climate action, while a package of €1.2 billion has been earmarked to help businesses respond to Brexit.

The carbon tax will rise from €26 per tonne to €80 per tonne in 2030. While the carbon tax is a pathway to achieve our 2030 climate targets, it will not deliver the emissions reductions we need to meet our 2020 climate targets. This is about changing behaviour in government, business and communities to bring about a revolutionary change in how we live, work and travel.

The Government needs to enable the transition to a low-carbon economy and focus on the sectors that represent Ireland’s largest emission sources – transport, agriculture and energy industries. Together, they represent 74% of Ireland’s greenhouse gas (GHG) emissions. To reduce this number, there is a need for Common Agricultural Policy reform, investment in transport infrastructure (electrification of public and private transport modes), and investment in renewable energy technologies to power a growing economy.

Play the long game

Organisations must think long-term and overcome the pressure to deliver short-term returns for shareholders at the detriment of future business sustainability. To be sustainable, companies need to consider the environmental, social and economic impacts of their activities and those of their supply chains. In terms of what ‘good’ looks like in the context of sustainability, companies should consider:

  • Placing responsibility for governance and sustainability within the management team, rather than relegating it to one department.
  • Connecting clearly the sustainability strategy to the business strategy and purpose of the organisation.
  • Validating the relevance of sustainability focus areas with both the business and its key stakeholders to ensure that the company is delivering on its intended stakeholder outcomes.
  • Developing metrics and targets to measure performance and ignite ambition for continuous improvement across the business.
  • Reporting and communicating sustainability performance publicly to stakeholders.
    Seeking assurance from third parties to build trust and transparency of disclosures.

A $26 trillion opportunity

Climate change is both a risk and an opportunity for business. According to the New Climate Economy, responding to climate change can unlock a $26 trillion opportunity through to 2030. Opportunities are ripe across many areas including the development of renewable energy or low-carbon technologies, new sustainable product solutions in sectors such as food and consumer products, and opening access to new forms of capital through sustainable finance.

People and communities have a critical role to play in leading, and embracing, the change. Lifestyle choices must be adapted, and we need to collectively make better decisions about how we power our homes, travel for work and leisure, manage our waste and water, and source our food.

The world is changing rapidly, and everyone needs to get on board. The scale of the challenge is enormous. We have 10 years to avert a climate catastrophe, and does this generation want to be the one that didn’t do enough to prevent it?

Lorraine McCann is Senior Manager and Leader, Climate Change and Sustainability Services at EY Ireland.