Climate change will cost governments billions of euros a year by the end of the decade, according to a new report by Ireland’s Fiscal Advisory Council, reports RTE.
The report, titled ‘What Climate Change Means for Ireland’s Public Finances’, examines the cost of failing to meet emissions targets, the expected reduction in some tax revenues and the cost estimates on modernization programs and agricultural support.
The report also highlights the potential knock-on effects on the insurance industry in terms of significant flood events and their importance to national exchequers.
The report points to estimates that Ireland will only achieve a 29% reduction in greenhouse gas emissions by 2030, compared to a 50% reduction target.
This will trigger payments under the EU Emissions Trading Scheme (ETS), reports RTE.
Citing a report by the Irish Economics and Evaluation Service (IGEES) published earlier this year, it could cost €3.5 billion by 2030, with annual costs of €700 million thereafter.
The report also examines, under a number of assumptions, what would happen to tax revenues if Ireland actually achieved its emissions targets.
IFAC is also trying to calculate what the government will need to spend to meet our emissions reduction targets, reports RTE.
The report estimates that flooding in Dublin, which occurs once every ten years, could cost between €333 million and €2.9 billion, with 14,514 properties at risk.
“Plan, plan, plan. It’s the only way we are going to get out of this. “What we’re seeing is this big ramp-up after 2026. All of the changes are going to happen really quickly thereafter,” the report’s author, Dr Eddie Casey said on RTE’s Morning Ireland.
“We’re going to be planning for ageing costs as well, and we’re already seeing some of the effects from the health system. So the only way we can do proper planning is have something like a speed limit, like the National spending rule that we can say, this is a sensible plan,” she added, reports RTE.
“We’ll have sustainable revenues. We don’t have to worry about how much corporation tax is coming in this week, next week, or what the economy is doing over the course of the cycle. We can just plan over the long term and have a realistic sense of what sustainable revenues are going to look like. This is the only way we’re going to deal with it,” she added reports RTE.
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