Carbon emissions sectoral limits plan: a range of ‘difficult policy trade-offs’

After weeks of torturous negotiations, the Government has agreed sectoral limits aimed at reducing carbon emissions by 51 per cent by 2030.

Ministers have been warned that the plan will “require very difficult policy trade-offs”, but will protect from the costs of doing nothing – demand shocks, supply shocks and inflation, as well as flooding, biodiversity loss and damage to water and human health. There will, however, be “distinctive challenges for rural communities”.

But how does the deal work – or not?

Voluntary cuts

Anything farmers do to try reach the target of a 25 per cent cut will be on a voluntary basis. This was a particularly important point as the biggest risk of Fine Gael or Fianna Fáil backbenchers walking was on the basis of mandatory cuts. But it means trade-offs and that shortfalls must be made up for elsewhere.

Renewable energy

The 25 per cent reduction in agriculture means a greater demand for cuts on electricity production – specifically, there will now be a target for another 2,000MW of offshore wind, which will be used to produce green hydrogen to provide electricity. This is one of several aspects dependent on technologies maturing by the decade’s end.

The heat sector will now need to use renewable heat technologies, probably renewable gas produced in anaerobic digesters on farms. There will be payments for farmers, as part of the move to encourage them to change the nature of their land use. There will be a range of sweeteners designed to change farming fundamentally.

Solar energy is another one, with an extra 3GW now being targeted by the end of the decade – more than doubling. Again, this will be on farms in many instances, so expect further incentives.

A third is more trees. Again, there will be payoffs for farmers to plant up to one hectare of native woodland. There will be measures in September’s budget.

Unallocated savings

If there’s a fudge, this is it – although the Government claims it was always planned. Unspecified “unallocated savings” will be, well, allocated across the economy over the period of the second carbon budget, from 2026-2030 – some 5.25 megatonnes of emissions reductions annually, adding up to 26 megatonnes over the period. This effectively presumes that there will be gains available which are not discernable now, and is key to getting to the 51 per cent overall goal.

The plan envisages “additional abatement measures” and new technologies needed at that stage.

LULUCF

We are deep in the jargon now, but this seems to have been a bit of a curveball. It stands for Land Use, Land-Use Change and Forestry and covers emissions from forests, crops, grasslands, wetlands and settlements, as well as other types of land. It is a net emitter of carbon. Emissions were projected to increase from five megatonnes in 2018 to seven in 2030 – but last month, the Environmental Protection Agency published its latest emissions projections and they jumped to 11 megatonnes. The Government is now deferring finalising the ceiling for this sector for 18 months to study the implications, and for a land use analysis to be completed.

Government sources say there’s a huge amount unknown here, and one added that it could be “extremely challenging and the sleeping giant of the climate targets”.