EPA - Ireland's Environment, An Integrated Assessment - 2020

Chapter 2: Climate Change In Ireland, forest-based solutions are currently the main focus for removals. The development of wider solutions across all land use types and systems is, however, needed. This should focus on sustainable land management to enable the accumulated removal of carbon. Additional technologies will also be needed, including direct air capture and bioenergy with carbon capture and storage. Many information and knowledge gaps exist with respect to these areas and technologies are not yet fully mature. Steps to address these gaps and to expedite this process are needed. Finance Flows A successful transition to a low-carbon economy will require a re-direction of investment towards ‘green growth’. This offers many employment opportunities and economic benefits. Finance flows are crucial to a country’s ability to transition to a low-carbon, climate-resilient economy and society and can act as either a driver or a barrier to progress. Public investment will not be sufficient to achieve transition. Individuals, households and businesses will have to step up with some of the required investment to achieve the low-carbon transition. Every investment in the low- carbon climate-resilient transition represents a business opportunity for a green entrepreneur to provide goods or services. Ireland already has world-leading home-grown businesses supplying energy efficiency and energy service solutions. A scale-up in domestic action on climate change means further opportunities for green businesses to expand and grow, leading to innovation and green jobs. Public Finance The National Development Plan 2018-2027 prioritises €21.8 billion in public investment to achieve the transition to a low-carbon and climate-resilient economy (DPER, 2018). Housing retrofits are expected to require €3 billion of this total. Other investments include €13.7 billion in the energy system for renewables, the grid and interconnection, €1 billion for flood defences and the establishment of a Climate Action Fund of €500 million. As noted in the plan, not all of this can be funded directly from the Exchequer. Funding for this investment will also come from state- owned enterprises and semi-state bodies. A new funding mechanism launched by the National Treasury Management Agency has raised €5 billion from the sale of Irish sovereign green bonds over 2018 and 2019 (NTMA, 2020). The success of the Irish green bonds to date will enable the government to raise more finance for investment in sustainable infrastructure at a low cost. But even this will not be sufficient. In the area of housing retrofits alone, the Sustainable Energy Authority of Ireland (SEAI) estimates that over €35 billion will be required over 35 years to make the existing housing stock low carbon by 2050. Private Finance Private sources of finance flows will be required to achieve the economy-wide transformation envisaged to 2050. Individuals, households and businesses will have to be motivated, supported or incentivised to finance their decarbonisation efforts. This is already happening. Thousands apply every year for grants to support their energy retrofit in order to achieve warmer, more comfortable homes with lower energy bills. Ireland needs to scale up this activity by making it easier for households or homeowners to invest in retrofitting, for example through new retail banking services that support energy efficiency or energy service contracts. Businesses will also need to find new ways to access finance for energy efficiency and low-carbon transformation. Realising the Opportunities Opportunities and significant co-benefits could emerge from transforming our economy to avoid the worst climate impacts. At a broad level the IPCC (2018) points out that potential benefits could include: n Economic opportunities, jobs and innovation from efficiency gains and the green economy. n Scaling-up of technological innovations in energy, buildings, transport, industry and agriculture sectors. This could be accelerated by breakthroughs in digitalisation, information and communication technology, artificial intelligence and biotechnology (EC, 2018b). n Cost savings from the long-term transition from fossil fuels to energy efficiency and renewable energy. This is projected to far outweigh the costs of transition as a result of efficiency gains, reduced air pollution, better health and lower environmental damage (IREA, 2018). n Co-benefits of improved air quality, reduced congestion, reduced nitrate pollution, improvements in health and wellbeing, enhanced nature and ecosystem services 10 (as covered in Chapters 3, 6, 7, 11 and 14), as well as reduced poverty and inequality, food and water security and reduced disaster risk. Nationally, groups such as Sustainable Nation Ireland promote Ireland as a world-leading hub for sustainable finance, business and innovation, accelerating Ireland’s transition to a low-carbon economy. With continued support, this could lead to additional economic activity and revenue in Ireland’s financial and services sector. Ireland already has world-leading businesses in areas such as home heating, insulation and electricity services. Support for climate action at home can act as a springboard for 10 The EU Biodiversity Strategy 2030 – Bringing nature back to our lives (COM(2020)380) – “https://ec.europa.eu/info/sites/info/files/ communication-annex-eu-biodiversity-strategy-2030_en.pdf 51