Climate Change Bill – More Aspiration Than Perspiration

Author:Mr Peter McLay, Rory Kirrane and William Carmody
Profession:Mason Hayes & Curran

Alan Kelly, Ireland's Minister for the Environment, Community and Local Government, published the "Climate Action and Low Carbon Development Bill 2015" (the "Carbon Bill") on Monday 19 January 2015.  Any piece of draft legislation that refers in its title to "climate" and "carbon" should trigger at least some level of alert for energy market participants, since the wider issue of greenhouse gas emissions underpins much of Ireland's current energy policy. 

Ireland's current carbon policy

As it stands Ireland is, as a result of the EU's 2009 "Effort Sharing Decision", obliged over the period of 2013-2020 to reduce its greenhouse gas (GHG) emissions by 20% relative to its 2005 emissions.  Commission Decision 2013/162/EU further sets out the specific yearly targets for each EU Member State for the years 2013 to 2020.  Ireland's 2013 emission target, by virtue of the Decision, was 45.16 million tonnes of "carbon dioxide equivalent" (Mt CO2eq), while the Environmental Protection Agency (EPA) has recently estimated (on a provisional basis) that Ireland emitted 57.81 Mt CO2eq during 2013.

While these emission reduction obligations bind the Irish government under EU law, it will be the aggregated activities of the Irish private and semi-State sectors (rather than the direct actions of the Irish government) that will determine whether or not these obligations are satisfied. 

The Irish government must therefore pursue its emission reduction obligations through the policy tools that happen to be at its disposal.  In relation to electricity, these tools currently include:

facilitating financial support, through the Public Service Obligation scheme, of the installation of new renewable electricity generation capacity, supporting, through a statutory permitting regime, the operation of the EU Emissions Trading Scheme (which, insofar as it applies to electricity, imposes upon thermal generators a cost associated with their emission of carbon); and measures intended to improve the efficiency of Ireland's energy usage, with a view to reducing (i) the demand for electricity; (ii) consequently, the supply of electricity; and (iii) GHG emissions from the production of electricity. Alongside their provisional 2013 estimates, the EPA make particular reference to the Irish energy (power generation) sector as contributing the most significant negative change in sectoral GHG emissions: a year-on-year decrease of 11.1%, despite electricity consumption increasing...

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