News

  In this week’s Public Policy news, read about how real-time financial and economic indicators are showing cautious market optimism; recommendations in a report published by the SME Growth Taskforce; updates regarding Ireland’s new Pensions Commission; and a finding that dramatic changes are required in Northern Ireland’s energy efficiency policy and funding to enable the UK meet its net-zero carbon emissions targets. Real-time financial and economic indicators show cautious market optimism Real-time financial and international economic indicators published this week by the Department of Finance show continued cautious market optimism, as the expectations of a vaccine-driven recovery in 2021 outweigh the global surge in Covid-19 cases and associated lockdowns. The data indicates a more muted international impact of the second lockdown, with more resilience in the manufacturing sector, in particular. The higher optimism reflected in the economic sentiment indicator suggests that the second wave of the pandemic has not been as detrimental to the global economy as the initial one, and that world trade has rebounded relatively quickly when compared to the global financial crisis. The latest set of economic forecasts from the Central Bank of Ireland, published this week, also indicate expansion in the Irish economy last year, with Irish output as measured by GDP growing by an estimated 2.5 percent in 2020, driven by a 4 percent increase in exports led by strong performance in the pharmaceuticals, technology and business services sectors. Irish modified domestic demand, however, decreased by 7 percent in 2020, and is likely to remain subdued in the early part of 2021, and a high rate of unemployment is expected. SME Growth Taskforce report sets out recommendations for Irish Government A report published this week by the Irish Government-appointed SME Growth Taskforce sets out a wide range of recommendations for the Government with long-term strategic relevance for SMEs and entrepreneurs. The report, entitled ‘SME and Entrepreneurship Growth Plan’, includes recommendations around scaling up, enhanced digitalisation, increased export activity, regulation and education, which will be reviewed by an SME and Entrepreneurship Implementation Group in early 2021, and will input into the development of the Government’s forthcoming National Economic Plan. The SME Growth Taskforce was set up in September 2020, and comprises entrepreneurs, business leaders and other individuals as established under a commitment in the Programme for Government – ‘Our Shared Future’. Its work draws upon an OECD Review of SME Entrepreneurship Policy in Ireland published in October 2019, which contained recommendations on how Ireland should respond to the long-term challenges faced by SMEs. It aims to map out an ambitious long-term growth plan for SMEs and entrepreneurs COVID-19.  Read more about the SME Growth Taskforce here. Pensions Commission website launches The website of the Pensions Commission was launched this week, providing links to the Commission’s Terms of Reference and full membership details, as well as agendas, minutes, presentations, and links to external reports. The Commission's membership represent workers, employers, civil society, academics and those with technical and policy expertise, and it has been tasked with examining sustainability and eligibility issues in respect of State Pension arrangements and with developing options for the Government to address issues such as qualifying age, contribution rates, total contributions and eligibility requirements. The Commission has met four times since 25 November 2020 (and will meet every two weeks in 2021), where it considered, among other things, the implications of the ageing population trends; the performance of the Social Insurance Fund through which the State Pension Contributory is paid; and trends in relation to the ageing workforce and the issue of retirement ages in employment contracts. ‘Dramatic change’ recommended for Northern Ireland’s Energy Efficiency Policy A report published this week that researches the future of Northern Ireland’s Energy Efficiency Policy finds that a dramatic change in policy extent and funding levels is required to enable Northern Ireland’s building energy performance to meet the UK’s net-zero carbon emissions targets. The report was commissioned by Northern Ireland’s Department for the Economy to inform the development of a new Energy Strategy for Northern Ireland. The report found that SMEs, which make up 99.6% of businesses in Northern Ireland, face barriers that deter them from adopting energy efficiency measures, including a lack of the time and resources to explore energy efficiency options, and the required skills, resources, and ability to provide the goods and services required to deliver energy efficiency. The report’s recommendations include: the establishment of minimum energy efficiency standards (MEES), financial incentives and the delivery of a retrofit programme in all existing building tenures; market research with consumers and building users to determine the preferred funding mechanism for the delivery of building upgrades; and a national ‘one-stop shop’ (OSS) designed to promote collaboration of national, regional, and community stakeholders. Read all our updates on our Public Policy web centre

  The trade deal makes way for a joint framework for cooperation on renewable energy and other sustainable practices, as well as the creation of a new model for energy trading. The agreement also sets out how EU and UK air transport operators, road haulage and passenger bus operators will be able to perform services between the EU and the UK as of 1 January 2021.   Climate Change The fight against climate change constitutes an “essential element” of the EU/UK Trade and Cooperation Agreement. It is the first time the EU has included it as an “essential element” in a bilateral agreement with a third country, meaning that, for example, if the either were to withdraw from the Paris Agreement – or take measures defeating its purpose – the other would have the right to suspend or even terminate part or all of the Agreement. It also means that for the first time, the fight against climate change is on par with other essential elements, namely democracy, human rights, the rule of law and non-proliferation of weapons of mass destruction. A strong principle of non-regression, including on carbon pricing, is included in the Agreement, ensuring that – at a minimum – the level of climate protection that had been in place at the end of the transition period will be guaranteed in the future, and will increase over time. Both the UK and the EU also reaffirmed their ambition to achieve economy-wide climate neutrality by 2050, although the UK will now define its own climate change targets and policies. The UK will no longer be part of the EU's joint action against climate change, and will not receive the financial support enjoyed by EU Member States to develop and deploy low-carbon technologies, or for adaption measures. It will leave the EU’s Emissions Trading Scheme (EU ETS) – the EU’s tool for reducing greenhouse gas emissions – and it will be excluded from its effort-sharing arrangements which allow Member States to share the burden of meeting decarbonisation targets. The EU and the UK, in recognising that their bilateral trade and investment must take place in a manner conducive to sustainable development, have also agreed to promote trade and investment in green goods, to cooperate bilaterally and at the international level on the sustainability agenda, and to encourage responsible business practices. They have agreed to promote the implementation of the United Nations 2030 Agenda and the United Nations’ Sustainable Development Goals, and to adhere to the implementation of relevant internationally agreed principles, rules and agreements. This includes the United Nations Framework Conventions on Climate Change, and the Paris Agreement. Energy While the UK will no longer participate in the EU’s internal energy market, the UK and EU have agreed to establish a new framework for future cooperation in the energy field, ensuring the efficiency of their cross-border trading. The UK has left the EU’s internal energy market, which ensures the security of supply and free flow of electricity, gas and oil to Member States.  The UK is a net importer of energy, with the EU currently providing some 5-10 percent of its electricity supply and 12 percent of its gas needs, which it receives over interconnectors (i.e. cables and pipelines). These are managed between Member States through existing Single Market tools. From 1 January 2021, only Northern Ireland maintains the Single Electricity Market with Ireland and the rest of the UK will have to trade with the EU on third-country terms.   Under the Agreement, the EU and the UK have agreed to establish a new framework for their future cooperation in energy, to ensure the efficiency of their cross-border trading, and to create ‘a robust level playing field’. The Agreement includes provisions guaranteeing non-discriminatory access to energy transport infrastructure and a predictable and efficient use of electricity and gas interconnectors, a new framework for cooperation between transmission system operators and energy regulators, provisions regulating subsidies to the energy sector; and provisions to ensure the security of supply. This is particularly relevant for Ireland, which will remain isolated from the EU internal energy market until new interconnections become operational. The UK has also left the European Atomic Energy Community. Cooperation on nuclear safety and uses of nuclear energy will be provided for under a separate agreement between Euratom and the UK. Transport The UK will no longer benefit from the principle of free movement of goods and people. The 210 million passengers and 230 million tonnes of cargo transported between the EU and the UK, by air, sea, road and rail can no longer operate freely between and within the Single Market, on the basis of a single licence or authorisation, and without being unduly hindered by border checks and controls. This means that all transport businesses conducting operations between the EU and the UK now have to ensure compliance with EU and UK certification requirements respectively, and transport operators will be affected by changes in the formalities required when crossing the UK-EU border. The UK will also no longer be a member of the European Union Aviation Safety Agency (EASA), and will have to build up its own capacity for aviation safety purposes. The Agreement covers the terms and conditions according to which EU and UK air transport operators, road haulage and passenger bus operators, and maritime transport operators will be able to perform services between the EU and the UK as of 1 January 2021. It also specifies the terms and conditions for EU-UK cooperation in the area of aviation safety. It includes provisions to ensure that competition between EU and UK operators takes place on a level playing field, ensuring high levels of transport safety, workers’ and passenger rights, and environmental protection.

Starting on Jan 20th, Dublin City Council is running MODOS Webinar Series - Pathways to the Circular Economy. Together with the Eastern-Midlands Regional Waste Management Plan Office, the Dublin City Council Economic Development Office is making available an interactive webinar series about the Circular Economy. Beginning on Wednesday, January 20th at 4pm to 5pm, the webinars are free and are packed with useful and specialist information  for businesses and for those interested in how we move to a more sustainable and resilient economy. Register here. A Circular Economy offers potential benefits for our economy, environment and communities. However, moving business models and operations towards circularity can be challenging. The MODOS Pathways to the Circular Economy webinar series provides expert knowledge and real-world insights about the practicalities of creating circular economy businesses and circular economy hubs in a post-COVID, post-BREXIT Ireland.  The webinars are produced by the Upthink Innovation Agency and are informed by the MODOS CE training programme for business,. The webinars will feature speakers from business, finance, policy and research and will address a range of topics including innovation, scaling businesses, leveraging finance, the role of technology and the potential of the bioeconomy. The MODOS Pathways to the Circular Economy webinar series is designed to inspire and create awareness for a range of stakeholders about the circular economy (CE) principles, concepts and practice. This series is aimed at SME’s, investors, public service actors, policy makers, public representatives, academics, students, social enterprises, change makers and citizens. A certificate of attendance will be awarded to all those attending 2 or more of the webinars in the series. The Pathways to the Circular Economy webinar series is FREE to attend, but registration is essential.  The webinar series topics and dates are as follows:  What is the Circular Economy?     4pm – Wednesday 20th January 2021 What is the case for the circular economy? Discover the opportunities, challenges and gaps. • Peter Corcoran – MBio • Dr. Geraldine Brennan – Irish Manufacturing Research (IMR) • Patrick Barrett – Dept. Agriculture, Food and Marine (DAFM) The Future of Food and Bio-Based Systems   4pm – Wednesday 27th January 2021    The world population is to exceed 9.8bn by 2050.  Food production needs to increase by 70% and net emissions reduced to zero.  What are the circular opportunities for growth in your business?   • Cliodhna Dowling – Nutramara • Teresa Patton – Green Generation  • Deirdre de Bhailís – The Dingle Hub • Dermot Hanley – Roundtable Partners   Financing the Circular Transition    4pm – Wednesday 3rd February 2021 The funding landscape and options. How is the transition financed? What are the funding options available to you?  • Dr. Geraldine Brennan – Irish Manufacturing Research (IMR) • Dr. Conor Hanley – CEO Fire1 Foundry • Filippo Giancarlo Martinelli – Irish Bioeconomy Foundation (IBF)   Re-thinking Packaging in the Circular Economy    .  4pm – Wednesday 10th February 2021   What is the future of packaging of our goods and food?  Plastics has a role to play. Is it using  plastic differently? There’s no single answer but we’ll discuss the options and opportunities. • Sinead Murphy – Waste Resources and Action Programme (WRAP) • Russell Walshe, Garrett Walshe – VivaGreen • Romain Couture – Irish Manufacturing Research (IMR)

The Sustainable Energy Authority of Ireland (SEAI) is offering free Energy Management Training to owners of small or medium-sized businesses concerned about rising energy costs.  The training will be an interactive online workshop, run by professional energy advisors. It aims to help attendees: Understand how much you are spending on energy Identify where your business uses the most energy Prioritise appropriate energy saving measures Plan and implement energy saving projects SEAI are also offering a free 30-minute consultation with an energy consultant. Email Business@seai.ie to secure your place, providing your Name, Job Title and the Name of your Business, the Sector in which you operate, and your business Mailing Address so that SEAI can post you the support materials.

The Prince of Wales has announced a new sustainable finance charter aimed at persuading businesses to embrace sustainablility. Called the 'Terra Carta', the charter sets out a 10-point action plan, amounting to almost 100 actions, for businesses to become more sustainable by 2030. Already backed by business such as the Bank of America, BP, Blackrock, Unilever and AstraZeneca, it aims to raise £7.3 billion to invest in the natural world by 2020. It will raise this through the Prince's newly launched Natural Capital Investment Alliance. Speaking at the One Planet Summit in Paris the Prince reportedly said "I can only encourage, in particular, those in industry and finance to provide practical leadership to this common project, as only they are able to mobilise the innovation, scale and resources that are required to transform our global economy." These initiatives will be needed by business community more than ever if it wants to protect itself from the impact of future pandemics. Speaking at the same Summit, European Commission President Ursula von der Leyen warned that countries will face future outbreaks like the coronavirus unless they effectively protect biodiversity. Von der Leyen pledged that the EU will invest “several hundred million euros” in biodiversity and animal-health related research projects, adding “if we don’t urgently act to protect our nature, we may already be at the beginning of an era of pandemics”. The One Planet Summit is an international conference that brings together heads of state and government as well as leaders of international organizations, financial institutions, the business sector and NGOs; this year's Summit is focusing on fighting biodiversity loss, which it describes as 'our life insurance'.  Over 50 countries have joined a 'High Ambition Coalition' and have pledged protect 30 percent of the planet’s land and seas. Many joined this coalition at a Summit event on Monday 11 January. The event was hosted by Ireland's former and former UN High Commissioner for Human Rights President Mary Robinson, and was attended by Minister of State Malcolm Noonan, who confirmed Ireland's participation.   

  In this week’s Public Policy news, read about Ireland’s latest Exchequer figures, a report on the economic and sectoral impact of the restrictions in Northern Ireland, and a landmark EU-China investment agreement. Department of Finance figures show Exchequer deficit and expenditure increase Figures released this week by Ireland’s Department of Finance have shown the extent of the COVID-19 pandemic on the nation’s financing with an Exchequer deficit of €12.3 billion recorded to the end of December 2020.  This compared to a surplus of more than €647 million in the same period last year. As expected, government expenditure increased considerably this year compared to 2019, particularly in the areas of health and social protection, with net expenditure reaching €67.8 billion. This represents a 25 percent (€13.7 billion) increase on last year’s expenditure. Receipts from tax were down €2.1 billion, or 3.9 percent compared to 2019 figures, although the reduction in income tax was less than anticipated, due to strong PAYE and self-employed returns. VAT receipts were €2.7 billion (18 percent) less than in 2019, a 1 percent reduction that caused by the impacts on consumer spending – particularly on services – by public health restrictions. Only corporation tax receipts were up on last year, by nearly 9 percent, amounting to €945 million reflecting strong performance in sectors such as pharma, ICT and financial services despite difficult economic circumstances. Report published on economic and sectoral impact of Northern Ireland’s autumn restrictions Northern Ireland’s Department for the Economy has published research carried out to analyse the economic and sectoral impact of the eight weeks of restrictions in autumn 2020. The report quantified the economic decline, caused by the public health restrictions which began in late March 2020, and the subsequent recovery during the summer months as local businesses reopened. The report estimates that due to the spring lockdown, output in the economy reduced by 25 percent with estimated consequent losses of around £4bn to £5bn across 2020. Despite a strong rebound in in Q3 of 2020, the research found that while the rebound was strong, the economy had not fully returned to pre-pandemic levels before the December restrictions were put in place. A new six-week lockdown took effect in Northern Ireland on 26 December, with further measures agreed on 5 January. EU and China reach agreement on major investment deal This week the EU and China concluded, in principle, negotiations for a Comprehensive Agreement on Investment. China and the EU are both ranked as each other’s second-largest trading partner (behind the US), with two-way goods commerce valued at more than €1bn a day. This agreement aims to create a better balance in their trade relationship and remove barriers to investment in China, such as some joint-venture requirements, caps on foreign ownership in certain industries, and the forced transfer of technology from foreign companies. It will give European companies greater access to Chinese markets, particularly to the manufacturing sector, but also to construction, advertising, air transport and telecoms sectors. The deal is expected to give China access to a small part of the European renewable energy sector on a reciprocal basis, responding to China's demands for access to the EU’s energy market. The agreement follows nearly seven years of negotiations, and needs to be ratified by the European parliament, a process that may not begin until the second half of 2021. Read all our updates on our Public Policy web centre