Green Budgeting Virtual Meeting - 5 October 2020

1. Greening Ireland’s Recovery
Laura Kevany
OECD Paris Collaborative on Green Budgeting
5th October 2020

2. 2 Rialtas na hÉireann | Government of Ireland
To serve the public interest by supporting the
delivery of well-managed, well-targeted and
sustainable public spending through
modernised, effective and accountable public
services.
The role of the Department of Public
Expenditure and Reform

3. 3 Rialtas na hÉireann | Government of Ireland
Ireland’s Climate Challenge
60.9m tonnes of Greenhouse Gas
Emissions in 2018
• An Emissions Profile more similar
to New Zealand than other EU
Member States
• Total Emissions Decrease of 0.1%
versus 2017
Agriculture
Transport
Buildings
Manufacturing
Electricity

4. 4 Rialtas na hÉireann | Government of Ireland
Meeting Ireland’s EU targets
Ireland has
been exceeding
our EU annual
greenhouse gas
emissions limits
since 2016.
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
2013 2014 2015 2016 2017 2018 2019 2020
MtonnesCo2eq
WAM non-ETS Emission Projections WEM non-ETS Emission Projections
Annual Limits

5. 5 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
The Scale of the Climate Action Challenge
-30% non-ETS target EU
2030 target but
New Government June 2020
– Coalition incorporating
green party
New Programme for
Government commits to:
• 51% cumulative emissions
reduction by 2030
• Net zero emissions by
2050
• Some 200 Climate Actions

6. Twin Challenges – Covid & Brexit

7. 7 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
0 10,000 20,000 30,000 40,000 50,000 60,000
total
social
protection
health
transport
other
2019
2020
current expenditure = €53.7 bn
→ €9.9 bn
→ 22.6% year-on-year increase
additional Covid-related expenditure on
social protection → €6.9 bn
→ 45.4% year-on-year
additional Covid-related expenditure on
health
→ €2.0 bn
→ 15.9% year-on-year
Covid Spending to Date
• Tax receipts down 3% on 2019
• Spending to support the economy
is up 25%
A deficit of €9.4 billion was recorded to
end-September 2020.
This compares with a surplus of €38
million in the same period last year.
Spent on:
• 45% Increase in Health Expenditure
• 16% Increase in Social Protection Expenditure
• 17% Capital Increase – mostly to support
vulnerable business
Votedgrosscurrentexpendituretoend-q3,2020vs2019,€millions

8. 8 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Covid Recovery Packages
Already one stimulus programme launched – July “Jobs” package. €7.4
(c. 2% GDP) billion package of measures designed to stimulate a jobs-
led recovery
• extension of covid employment supports, 0% loans, credit
guarantees, support for higher education
But also support for sustainable initiatives:
 €10m New Green Enterprise Fund
 €100m commitment for Energy Efficiency
 €113m investment in sustainable mobility
Small sums for climate but intended to lay foundation for capital
investment in 2021

9. 9 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Budget 2021
• Ireland’s National Budget to be
published on October 13th
2020
• A Covid and Brexit budget.
Commitment to climate also.
• Likely to be increase in carbon
tax and renewed commitment
to hypothecation of revenues

10. 10 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
3 Key Medium/Long Term Recovery
Packages
1. National Economic Plan
• To be launched November 2020
• Objective to set out where Ireland want to get to post-crisis, the longer-term policy approaches to get
us there and associated trade-offs, while ensuring short term responses to the pandemic and Brexit
are consistent with longer-term goals.
2. EU Recovery & Resilience Fund
• National Plans required by April 2021.
• Objective to invest in the EU’s common priorities, notably green, digital and social resilience to help
create jobs and sustainable growth, while modernising EU economies.
• €312.5 billion in grants and up to €360 billion in loans - 37% of available funds must be allocated for
climate purposes.
3. National Development Plan
• To be published Q2 2021
• The most critical document to “green” as it will determine the specific public investments to made
over 2021- 2030.

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11 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Strategic Investment
Need to align investment with priorities for post-crisis economy, through the forthcoming review of the
National Development Plan.
• Counter-cyclical policy – counterbalancing effect to the economic impact of Covid-19
• Green investment – retrofitting, public transport infrastructure, renewable energy, the Climate
Action Fund and R&D
• Regional development – in particular, sustainable regional development
• Priority infrastructure gaps – such as housing, flood defences, transport and water
infrastructure
• Changes in enterprise and labour market – research and innovation, broadband, higher and
further education infrastructure, and digital hubs
How to leverage private investment (high savings rate) to support priorities
Use Plan to identify priorities for accessing EU Recovery and Resilience Fund, and other EU
Funds such as Just Transition Fund

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12 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Investment Needs for a Low Carbon
Economy
• Social and economic disruption of the green transition requires investment in retraining and reskilling opportunities.
• Support citizens to make the carbon friendly investment decisions through grants and other active incentives.
• Shift the focus within many sectors , such as agriculture, transport, energy, tourism, and construction to a more
sustainable model.
• Decarbonisation will likely involve downsizing in these sectors which may exacerbate existing economic disparities
between the regions and disproportionately impact lower income groups, unless alternative green and sustainable jobs are
created for displaced workers.
• Ensuring a Just Transition is a central component of our approach, supporting workers, sectors, and regions most
exposed, and engaging with workers from disrupted sectors and regions to guide them towards education, retraining and
employment opportunities.
• Complementing the Climate Plan, focussed attention is given to increasing our capacity and understanding in sustainable
areas including the development of a National Circular Economy Action Plan and encouraging more Green RD&I.

13. 13 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Greening the Recovery Plans
The specific tools that will be used to asses the “greenness” of recovery plans are still under
consideration. However:
 A “green” strategic framework will set through the development over the next 6 months of a new
Government Climate Action Plan that will give effect to the new targets articulated in the Programme
for Government
 This will influence the Exchequer resource allocation decisions that will need to be made in the
National Development Plan
 Ex-Ante Impact Assessments will be required for measures proposed in the National Development
Plan – both climate positive and climate negative. The goal is to determine the emissions savings
that may be achieved, along with the potential cost per tonne of emissions saved (while not ignoring
co-benefits)
 Since Ireland will soon set a legislative goal to reach net zero emissions by 2050, green conditionality
likely to attach to long term investments.

14. 14 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Taking Stock
• Ireland has come through the initial economic shock of covid with unprecedented levels of State intervention
stabilising the economy
• We still face significant uncertainty around the continued impact of covid and the potential impact of Brexit
• After the publication of Budget 2021, consideration will move to the development of recovery packages
• The scale and nature of the challenge to meet Irelands ambitious carbon emissions targets and lay the foundations
for achieving carbon neutral economy by 2050 cannot be overstated
• Our climate performance has to go from negligible reductions of 0.1% to reach an average of 7% per annum
• This will not be achieved without a complete refocus of societal priorities, coupled with adequate State investment.
• 6 – 9 months available to meet the clear political imperative and public expectation
• Balancing the recovery plans will be tricky as will avoiding confusion

15. Contact us:
Laura.kevany@per.gov.ie
Ken.cleary@per.gov.ie