This week’s bulletin looks at Ireland's first carbon budgets and the spending allocated to Northern Ireland from the UK’s Autumn Budget which includes funding for levelling up, climate change and a new trade and investment hub in Belfast. We also cover the launch of Ireland’s public conversation on well-being as well as the announcement that renewables have overtaken fossil fuels as the number one power source in the EU.
Ireland's Climate Change Advisory Council (CCAC) publishes proposed carbon budgets
This week, the CCAC presented proposed carbon budgets to the Irish Government setting out the limits on greenhouse gas emissions for 5-year periods of time. The first carbon budget programme will comprise carbon budgets for the following periods: 2021-2025; 2026-2030 and 2031-2035, with the carbon budget for 2031-2035 being provisional.
The average year-on-year reductions in the first budget which runs until the end of 2025 has been set at just under 4.8 per cent, while the average year-on-year reductions in the second budget to 2030 is set at 8.3 per cent. A limit of 295 million tonnes of CO2 equivalent has been set on emissions for 2021-2025 and a 200 million tonnes CO2 limit for 2026-2030 relative to a 2018 baseline. The carbon budget for 2031-2035, which is provisional, is recommended at 151 million tonnes CO2.
The budgets are part of a roadmap of actions legislated for under the Climate Action and Low Carbon Development (Amendment) Act 2021. The Act commits Ireland to reach a legally-binding target of net-zero emissions no later than 2050, and a cut of 51 percent by 2030 (compared to 2018 levels).
Commenting on the programme, Marie Donnelly, Chair of the CCAC said:
“The proposed carbon budgets will have an impact on society and the economy but allow us to act on climate change in a planned and organised way. The budget is based on the best available science and defines an appropriate and necessary path to addressing the climate challenge. Many of the changes required now will only have a real impact on emissions in the second period. Now is the time to put policies and supports in place that will help those people, communities and businesses that will be impacted by the significant changes we need to make to how we live, work and travel.”
Noting the requirement for everyone in society to play their part, Ms Donnelly said “the carbon budgets provide a framework, but what is urgently required is transformative change which is led by all of Government on a sustained basis, supported by all sectors of the economy, and all members of society. This will require significant investment across the economy.”
The proposed carbon budgets will go to Government and then to the Oireachtas. The Oireachtas will review and approve the budgets within a 4-month period. Once these overall, economy-wide carbon budgets are approved, the Government will have the challenge of dividing the overall carbon budgets into sectoral emissions ceilings.
A sectoral emissions ceiling is the maximum amount of greenhouse gas emissions that are permitted in a sector of the economy during each 5-year carbon budget. The Minister for the Environment, Climate and Communications, in consultation with other relevant Ministers, will develop a sectoral emissions ceiling for each relevant sector within each 5-year budget, once the overall carbon budget has been adopted.
The Environmental Protection Agency (EPA) and the CCAC will produce annual reports to inform monitoring of compliance with national and sectoral progress towards each carbon budget and sectoral emissions ceiling.
More information can be found at this link.
UK’s Autumn Budget and Spending Review - “prepares the world for a new economy post-Covid”
UK Chancellor, Rishi Sunak announced the UK government’s Autumn Budget and Spending Review 2021 this week, in which he pledged a major increase in public spending of £150 billion by 2024-25 amid higher-than-expected economic growth. The Spending Review 2021 (SR) sets departmental budgets up to 2024-25.
Specifically for Northern Ireland, the Chancellor promised the Northern Ireland Executive an extra £1.6bn per year on average over the next three years, on top of its annual £13.4bn spending settlement (see Box 3.C ). This according to the budgetary documents represents the largest annual funding settlement for the devolved governments since 1998.
Spending specific to Northern Ireland includes:
£1 billion for farmers and land managers and £9.3 million to support fisheries over the SR
An additional £70 million funding for the British Business Bank to build on its existing programmes in Northern Ireland
Establishing a new trade and investment hub in Belfast, to enable the benefits of the UK’s global trade policy are channelled to Northern Ireland
A separate £150 million Community Ownership Fund, established to protect “treasured assets” will allocate funds to develop a digital hub in Cushendall, Co. Antrim.
£14.9 million for the Tackling Paramilitarism Programme over the SR, contributing to a safer Northern Ireland.
The drive to net zero
Significant spending has been allocated across the UK to boost the drive towards net zero by 2050 including:
£3.9 billion to decarbonise buildings, including £1.8 billion to support low-income households to make the transition to net zero while reducing their energy bills.
£6.1 billion to boost the number of zero emission vehicles, help to develop greener planes and ships, and encourage more trips by bus, bicycle, and foot.
£380 million for the UK’s offshore wind sector including investment in offshore wind ports in Teesside and the Humber
Funding for the £1 billion Net Zero Innovation Portfolio which is accelerating near-to-market low-carbon technology innovations
£385 million to develop the next generation of small and advanced modular reactor technologies.
A further £625 million for the Nature for Climate Fund, ensuring total spend of more than £750 million by 2024-25 to help meet the commitment to plant at least 7,500 hectares of trees every year in England by 2025 and restore 35,000 hectares of peatland.
Levelling up
The UK government’s ambition behind the concept of ‘levelling up’ is to reduce inequality between places (‘levelling’) while improving outcomes in all places (‘levelling up’).
The levelling up agenda, which involves the creation of a Levelling Up Fund commits to investment in infrastructure that improves everyday life across the UK, including regenerating town centre and high streets, upgrading local transport, and investing in cultural and heritage assets.
The Autumn Budget announced some specific measures for Northern Ireland with £49 million allocated from the Levelling Up Fund for 11 projects, including:
an Electric Vehicle charging network across Northern Ireland,
the redevelopment of a derelict Ministry of Defence site in Derry/Londonderry into an urban community farm, and
improved sports facilities in Portrush.
Read the Budgetary documents as well as a summary of measures announced.
For an overview of the key tax highlights, please read the Institutes newsletter that issued this week.
Ireland launches a public conversation on the Well-being Framework
This week, the Irish Government launched a public conversation on the Well-being Framework for Ireland. This follows publication of the first report on Ireland’s Well-being Framework in July, which proposed a vision and conceptual framework for Ireland.
The overarching vision for the framework, is enabling everyone to live fulfilled lives now and into the future. The Well-being Framework is made up of a Conceptual Framework, with 11 dimensions or elements including, subjective well-being, mental and physical health, housing, environment and climate, knowledge and skills and work and job quality.
A Well-being Portal has been published which will allow users to explore the well-being initiative in more depth and to engage with ongoing and future work in the area. The CSO also provide statistics on how Ireland is doing in terms of well-being as well as comparing Ireland internationally. People are encouraged to give their views on the Framework, via a survey.
Speaking at the launch this week, Taoiseach Micheál Martin said:
“The Well-being Framework represents an important shift towards systematically understanding and measuring progress in the collective areas that provide for a good life in Ireland. I would encourage people to engage with this important cross-Government initiative. It is only through feedback that we can improve the Framework in order to better reflect what is important for the people of Ireland. I also welcome the publication of the CSO’s Wellbeing Information Hub today and thank them for their ongoing work in providing good quality data in the area of well-being and quality of life.”
Renewables overtake fossil fuels as the number one power source in the EU
The EU’s recently published State of the Energy Union report shows that renewables overtook fossil fuels as the number one power source in the EU for the first time in 2020, generating 38 percent of electricity, compared to 37 percent for fossil fuels.
The report analyses how energy and climate policies have been impacted by the COVID-19 pandemic in the past year, and it presents the substantial legislative progress in pursuing the EU's decarbonisation efforts.
To date, nine EU Member States have already phased out coal, 13 others have committed to a phase-out date, and four are considering possible timelines. Compared to 2019, EU27 greenhouse gas emissions in 2020 fell by almost 10 percent, mainly due to the COVID-19 pandemic, which brought overall emission reductions to 31 percent, compared to 1990.
Read the report.