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Why does the Irish Government never seem to anticipate when
big changes are going to be necessary and start preparing
for them in good time? And, even when it accepts that changes
must come, why does it always drag its feet? Two severe crises
are about to break over us because of this behaviour.
The Emissions Crisis:
Ireland is going to have to pay heavy penalties to the EU
for its failure to keep its CO2 emissions in check. In 1998,
so that the EU-15 as a whole could honour its commitment under
the Kyoto Protocol to reduce its total greenhouse emissions
by 8%, Ireland agreed to ensure that, between 2008 and 2012,
its emissions would not be more than 13% above their 1990
level. Immediately after signing this agreement, the government
allowed the construction of two cement plants which, by one
estimate, used up all the permitted increase in emissions
by themselves. As a result, as early as May 1999, the European
Commission was forecasting that Ireland would miss the emissions
target by between 14 and 34%. Figures issued last year by
the European Environment Agency put the country right in the
middle of that range.
The main tool that the government was considering using to
approach its emissions target was a carbon tax but it was
announced in September (2004) that plans for this had been
abandoned. As a result, the only way that Ireland can hit
the target now is for the economy to collapse so that air
and road transport is reduced and almost all construction
work stops.
If things continue as they are, we will be able to cover some
of the emissions over-run by buying emissions permits from
Britain , Sweden , Luxembourg and Germany which, as the chart
shows, have some to spare because they have cut back more
than they promised. However, these permits are likely to be
expensive given that other EU countries are having problems
meeting their commitments too. Moreover, European Commission
restrictions mean that permits can only be bought to cover
emissions up to 10 per cent above the target. After that,
the country will be fined €40 per tonne for every tonne
of carbon dioxide in excess of the limit between 2005 and
2008, and €100 a tonne from then until 2012.
A €100 per tonne fine would increase the cost
of a kilowatt-hour of electricity from Ireland 's two new
peat stations by 14.3 cents, from Moneypoint, a coal-burning
station by 9.2 cents, and by 4.6 cents from a typical gas-fired
station. But would energy users pay these fines through their
electricity and fossil fuel bills, or would the cost, which
the economist Peter Bacon estimates could increase to $1,300
million a year, be carried by the taxpayer, thus subsidising
energy consumption and preventing the market telling people
to find ways of using less power? Dermot Ahern, who carried
energy in his ministerial portfolio until recently, looked
totally bewildered when I asked him last year how the cost
of paying the fines would be handled.
The Second Crisis:
Ireland had six years warning of the emissions crisis
and did nothing. It has had thirty years to get ready for
the second, much more serious one and has done nothing about
that too. The second crisis is that world oil production has
peaked, or is about to do so in the next few months, and after
the peak it will never reach current levels again.
The significance of this is that the present size of the world
economy is only possible because of high levels of fossil
energy use, and if the supply of that energy begins to contract,
particularly the main form of energy used by the transport
system, then the global economy will contract too. We are,
in short, at a turning point in human history. Moreover, global
gas supplies will peak in a few years too. The total amount
of energy available to humanity from both gas and oil will
begin to fall within the next 10-12 years.
The oil peak is the reason why all energy prices are so high
at present, although the media blames a set of little local
difficulties such as hurricanes in the Gulf and unrest in
Nigeria and Iraq rather than the fundamental cause.
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