Budget 2023 must invest in improving our energy infrastructure and a Just Transition
Posted on Monday, 19 September 2022
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. There is enough room for investment in Budget 2023 to begin to implement the Climate Action Plan, secure our energy infrastructure, and ensure a just transition to a green economy. This would also mean, emission reductions, and the creation of a vibrant society and economy.
Transition is not just about reducing emissions. It is also about benefitting both our society and our economy. It’s about 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. The investment required to deliver a Just Transition must be a key component of Budget 2023.
Ambition and investment required
Energy is one of the key drivers in the increased cost of living. In order to meet our own energy targets, to increase our renewable energy supply and to deliver long-term sustained reductions in energy costs Government must invest in renewable energy. This means diverting fossil fuel subsidies to support renewable energy and investing substantially to improve and upgrade our energy infrastructure. Government should also introduce a windfall tax on energy suppliers and oil companies which could generate €100m which should be invested in our energy infrastructure and support the reduction of energy poverty. In addition, 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. Our investment strategy must be built on the principle of social investment and just transition.
Summary of Social Justice Ireland’s key proposals in Just Transition Budget 2023:
Energy generation: Investment in our renewable energy generation and storage 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.
Fuel allowance: The Fuel allowance should be extended to 32 weeks in Budget 2023. In addition, Government should consider how to best implement the OECD recommendation to rebrand fuel allowance and provide it to eligible households during the whole year with a view to fully delinking it from heating fuels as a means to support households as we meet our climate goals.
Upgrade energy and storage infrastructure: Social Justice Ireland proposes 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 producing the proportion of renewable electricity that it needs. This is a first step to ensure that Data Centres make an appropriate contribution to Ireland’s renewable energy targets.
Government should introduce a windfall gains tax on energy suppliers and oil companies which would yield approximately €100m in Budget 2023 which should be invested in our energy infrastructure and strategies to eliminate energy poverty.
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.
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.
Transport: The transport sector is a key contributor to Ireland’s greenhouse gas emissions, and air travel is a significant contributor to transport emissions. Social Justice Ireland proposes the removal of the exemption of Jet Kerosene from excise and carbon taxes in Budget 2023 to yield €634m. 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.
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 sustainable agricultural methods. Behaviour change, reduced input costs, and reduced herd and soil emissions should all be incentivised.
An economy that supports sustainable development: 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.