Policy Options to Reduce Ireland's Greenhouse Gas Emissions

A side effect of the economic downturn since 2008 is that Ireland may meet its Kyoto Protocol commitment for 2008-2012 to reduce its greenhouse gas emissions, but that its longer term targets for 2020 and beyond are still stringent. This paper addresses both the political challenge and the economic implications of moving to a low-carbon state. The cost of reducing carbon emissions varies widely and heavy costs could be incurred. A soundly based policy framework that keeps costs down is thus essential, while being mindful of effects on the economy and the vulnerable; the pause in economic growth provides an opportunity for long-term planning. The criteria for policy are primarily threefold: regulatory certainty, including protection from short-term political interference; clearly defined incentives that ensure a credible, long-term price of carbon; and a transparent, dynamic and fair process with which the public can engage. The roles of various policy instruments are discussed, including regulatory and market-based instruments, subsidies and taxation.