Budget 2023 must begin the process of a Just Transition

One of the fundamental principles of a Just Transition is to leave no people, communities, economic sectors or regions behind as we transition to a low carbon future. Transition is not just about reducing emissions. It is also about transforming our society and our economy, and investing in effective and integrated social protection systems, education, training and lifelong learning, childcare, out of school care, health care, long term care and other quality services. Social investment must be a top priority of transition because it  will support those people, communities, sectors and regions who will be most impacted as we transform how our economy and society operates.  The proposed Climate Dialogue must be built on the principle of social investment and just transition. 

Government must embed a Sustainable Development Framework into economic policy.  This would ensure that policies are socially, economically and environmentally sustainable.  Existing work on Wellbeing Indicators must be progressed so that we can move beyond simply measuring GPD, GNI and GNI*, and include other indicators of environmental and social progress such as the value of unpaid work to the economy and the cost of depletion of our finite natural resources.

Budget 2023 provides an opportunity to ensure that our investment strategy supports the ambition of the climate action plan, a just transition to a green economy, emission reductions, and builds a vibrant society and economy. 

 

Transport

Social Justice Ireland proposes the removal of the exemption of Jet Kerosene from excise and carbon taxes in Budget 2023 to yield €634m.   Air travel is a significant contributor to transport emissions, this would ensure that air travel makes a contribution to carbon budgets for the transport sector and implement the recommendation of the Report on the Impact of Aviation Taxation.

Aggregate Levy

To promote the recycling of aggregates (rocks, sand and gravel) in the building industry, and the re-use of old buildings, Social Justice Ireland proposes the introduction of an aggregate levy of €2.50 per tonne in Budget 2023.  This would generate an estimated yield of €75m.

Retrofitting and Energy Efficiency

One of the most cost-effective measures for meeting our emission and energy targets is to increase building energy efficiency. Social Justice Ireland proposes that €85m be allocated in Budget 2023 for a retrofitting programme modelled on the Energiesprong programme in the Netherlands with €10m targeted for improving ventilation in public buildings. 

Investment in our renewable energy generation capacity is a key priority to reduce our reliance on fossil fuels and meet our 2030 targets.  €100m should be invested in the development of renewable energy sources, €2m of which should be ringfenced to establish a network of community energy advisors to engage with and inform people and households in energy poverty and hard-to-reach energy users.

We propose an initial allocation of €30m to upgrading the national grid and a reform of the RESS auction to make it more accessible for communities, individuals and farmers.  €15m should be invested in expanding the charging infrastructure for electric vehicles.  The PSO levy should be reorganised according to average demand.  This would ensure that each sector is responsible for the proportion of renewable electricity that it gives rise to.  This is a first step to ensure that Data Centres make an appropriate contribution to Ireland’s renewable energy targets. 

Reducing Waste

To reduce the level of municipal waste going to landfill and promote the use of re-usable, biodegradable and compostable products, Social Justice Ireland proposes an investment of €82m to support the rollout of the proposed deposit and return scheme for sealed beverage containers in Budget 2023.  This would boost recycling and yield an economic return of approximately €96m per annum.

Biodiversity and Nature

Budget 2023 should invest €10m in the National Parks and Wildlife Service and in the National Biodiversity Centre to scale up policies to support biodiversity, mainstream biodiversity into economic decision-making and support community led projects. 

Investing in the Future—the Circular Economy

Social Justice Ireland proposes an allocation of €10m in Budget 2023 to begin the rollout of the Circular Economy Strategy concentrating on areas such as sustainable agriculture, bio-economy, and recognition of the interconnectivity between the economy, environment and society.

Agriculture

Government should reorganise the CAP system to provide an enabling environmental pathway to new entrants.  Incentives within current agricultural policy must be redirected to support those farmers who are engaged in environmentally friendly practices and who are engaged in sustainable agricultural methods.  Behaviour change, reduced input costs, and reduced herd and soil emissions should all be incentivised. 

Fossil fuel subsidies and tax expenditures

In Budget 2023 Government should begin the process of ending fossil fuel subsidies and environmentally harmful tax expenditures. These not-insignificant resources (€2.2bn in revenue foregone in 2020) should be invested in in renewable energy, addressing energy poverty and a deep retrofitting programme for homes and community facilities.  As a first step Government should review all fossil fuel and environmentally harmful subsidies, introduce sunset clauses where necessary and divert these funds to renewable energy programmes, reforming and expanding the fuel allowance as recommended in by the OECD in 2021, and additional investment in Just Transition Programmes beyond the expected €174m investment from carbon tax.

Our Budget Choices 2023 policy briefing is available to download now.