Spending Overruns Undermine Emissions Targets

The European Court of Auditors expect that many EU countries, including Ireland, will not meet their 2020 targets for the share of total energy from renewables :

• six Member States are unlikely to meet their 2020 target as they need an increase in the share from renewables by: the Netherlands 7.4 pp, France 6.7 pp, Ireland 5.3 pp, the United Kingdom 4.8 pp, Luxembourg 4.6 pp and Poland 4.1 pp.  

•   the Netherlands shows the largest gap, with an actual average share of 5.9% for 2015/2016, versus an indicative RED trajectory of 7.6%. The gap to the planned NREAP share of 9.7% renewable energy in 2016 is even larger. 

•  for 11 Member States (Belgium, Cyprus France, Greece, Ireland, Luxembourg, Malta, the Netherlands, Poland, Portugal and the United Kingdom), currently implemented renewable energy policies and already planned renewable energy policy initiatives appear today to be insufficient to trigger the required renewable energy volumes purely domestically. 

• In addition, for 7 Member States (Austria, Germany, Latvia, Romania, Slovenia, Slovakia and Spain) there is some uncertainty related to 2020 renewable energy target achievement. Their capability of meeting their 2020 national binding targets will to a great extend depend on the levels of energy demand in case there would be a large increase in energy demand that brings their energy consumption back in line with the original trend indicated by the latest EU reference scenario.   

This should be seen as a serious indictment of Ireland's wind only policy which has completely failed to reduce emissions at any meaningful level. The idea that the EU will fine every one of these countries, that are also unlikely to meet their targets, now seems increasingly unlikely, as the widespread impracticality of the targets becomes manifest.

Ireland has already spent €86 million in buying carbon credits to offset it's high emissions with the cost potentially running to billions over the next decade. As with health and foreign aid policy (in fact every policy), Ireland's answer is always to spend more (taxpayers) money instead of doing some actual analysis to uncover the root cause of the problem.

Sustainable Economics is a Sustainable Environment

The simple fact, as this blog has pointed out previously, is that the more the government spend, the higher the emissions. Higher welfare spending, for example, results in more resources consumed beyond our means, more imported goods, higher immigration and more waste material like plastics. High government and private debt also encourages more wasteful spending.

A policy that would encourage more savings and less debt would result in lower emissions. Higher savings means more deferred purchasing, which means lower emissions in the short to medium term. 

It is perhaps somewhat ironic that the most climate change obsessed government in Irish history is also the worst offender when it comes to out of control spending. The Irish Fiscal Council last week reported that the government breached post financial crisis spending rules last year, and the increases in spending in recent years were not "conducive to prudent economic and budgetary management".   They warned that the spending had reached a similar magnitude to those prior to the 2008 crisis (funnily enough when the green party were last in government). Cormac Lucey has worked out that the cost of the spending overruns last year was € 3,500 per person living in the state. Instead of putting away the additional tax receipts into a rainy day fund, which would have lowered emissions, every cent has been squandered. 

And the more the government continues to spend recklessly, the more carbon credits they will need to purchase to offset the extra emissions meaning that the spending overruns are set to become a vicious cycle. If Ireland wants to get serious about reducing emissions it  needs a prudent government.