Joint Oireachtas Committee on Climate Change and Energy Security Comparison Between

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1 Joint Oireachtas Committee on Climate Change and Energy Security Comparison Between The Climate Change Response Bill 2010 (published by the Minister for the Environment, Heritage and Local Government) and the Climate Change Bill 2010 as approved by the Joint Committee

2 Overview Both the Joint Committee and Government recognise the need for legislation in the area of climate change. The Government s Climate Change Response (CCR) Bill, 2010 takes account of feedback received in response to its Framework Proposals for a Climate Change Bill published earlier in the year. There is a consensus that it is important for investment decisions and policy-making that clear binding targets are set down in primary legislation. The Joint Committee s Reports on Climate Change Law (December 2009 and October 2010) set down many basic principles and policies which are reflected in the Government s Bill. For example, there is agreement on targets; on providing a statutory basis for the National Climate Change Strategy, including adaptation measures; on setting up an independent expert group; and arrangements for monitoring and reporting. Where the Joint Committee goes further is in relation to its proposals to bring responsibility for climate change and renewable energy under the remit of the Taoiseach; that a new State Agency (in effect and amalgamation of existing bodies) be set up to drive the implementation of the EU s targets; that the Oireachtas should have a greater role in relation to reviewing the implementation of climate change policy;

3 that climate change strategy be more aligned with Ireland s targets for renewable energy; and that enabling legislation be enacted in relation to domestic offsets. An integrated approach is lacking at present so a Climate Change Bill provides an opportunity to put in place structures, and streamlined reporting, advisory, policy-making and monitoring arrangements that are fit for purpose. The Joint Committee believes that the Oireachtas should play a more important role in terms of ensuring decisions are taken in a transparent manner and that the Government s actions are subject to regular scrutiny. On specifics, the Joint Committee s report, which was based on peer review of similar legislation in other jurisdictions, recommends some innovative ideas such as the setting up of a Climate Change Dividend Fund and setting a framework for grant supports for a transition to a low carbon economy, which are not included in the Government s proposal. Finally, the Joint Committee has proposed that the Climate Change legislation should be used to transpose into Irish law the relevant provisions of the EU ETS and other Directives adopted as part of the package in December 2008.

4 Joint Committee s Bill Climate Change Response Bill 2010 Comment Purpose of Bill The purpose of the Bill is to make provisions, including, where appropriate, framework or enabling provision, for Ireland to achieve a long-term goal of reducing greenhouse gas (GHG) emissions to at least 80% below 1990 levels by Its main elements are: Setting multi-annual GHG emission reductions targets in line with the EU s commitment to reduce emissions in the non-traded sector by at least 20% with reference to a 2005 baseline by 2020 (and by 30% if there is global agreement for the period post-2012). Setting energy and electricity efficiency targets also taking into account decisions taken at EU level. The setting up of an Office of Climate Change and Renewable Energy under the auspices of the Department of the Taoiseach. The Office will be responsible for policy formulation and implementation, including for example the setting of policy in relation to Ireland s Carbon Fund. The preparation of a National Climate Change The key provisions of the Climate Change Response Bill are as follows: A core objective on transition to a low carbon, climate resilient and environmentally sustainable economy. A short-term target to reduce GHG emissions by an average of 2.5% per year, compared to 2008 emissions, by A medium-term target to reduce emissions by 40% by 2030 and a longterm target of 80% by 2050, both compared to 1990 emissions, to act as additional milestones on the transition pathway. The requirement for the Minister for the Environment, Heritage and Local Government, with the approval of the Government, to produce a National Climate Change Plan which will address both GHG mitigation, and adaptation to the impacts of climate change. The power for the Government to The main principles and policies of the JC proposals and the previous Framework Proposals were almost identical. However, the CCR Bill does not include several provisions that were previously articulated. For example, the JC s and the Government s initial proposals provided for: 1. The same targets for a reduction in GHG emissions. 2. A National Climate Change Strategy. 3. Putting the Carbon Budget Statement on a statutory footing. 4. A Climate Change Commission. 5. Domestic offsets. 6. Detailed provisions monitoring and reporting. The CCR Bill differs from the JC s reports in important respects, as follows: 1. The JC proposes that the legislation deal with both climate change and

5 Strategy (NCCS) (including mitigation and adaptation measures) based on scientific evidence and economic and social factors. The NCCS will be reviewed by the Oireachtas annually with reference to the Annual Climate Change Statement to be made by the Taoiseach. This statement will be supported by the adoption of an Annual Carbon Budget. The setting up of a Climate Change Commission (CCC), a new independent body with an advisory mandate. New reporting arrangements, including annual reports from the CCC, to cover inter alia Ireland s distance to target, progress in introducing the measures set out in the NCCS, EU and international developments on climate change, new scientific evidence, and the purchasing strategy of Ireland s Carbon Fund. Subject to the opinion of the CCC, the introduction of domestic offset and other schemes, including forest carbon offsets, to increase the policy options available to Government in relation to emissions from the non-traded sector. These schemes will be administered by the Office of Climate Change and Renewable Energy. The carrying out by the CCC, in consultation with other stakeholders and experts, every five years of an impact assessment of the risks for Ireland arising from climate change and the introduction of supporting measures, domestic, require such Ministers as it considers appropriate to produce Sectoral Climate Change Plans to address mitigation and adaptation in their areas of responsibility. The establishment of an Expert Advisory Board (EAB) to advise Ministers and the Government in relation to functions under the Bill, including the National Mitigation and Adaptation Plans, Sectoral Plans and the Annual Transition Statement. The placing of obligations on public bodies in relation to climate change mitigation and adaptation. renewable energy. 2. No role is envisaged for the Taoiseach in the CCR Bill. 3. The CCR Bill does not support the setting up of a Climate Change Dividend Fund. 4. The CCR Bill does not provide for an Office of Climate Change and Renewable Energy. 5. The respective remits of the Climate Change Commission and the EAB are somewhat different. 6. The CCR Bill drops the idea of a Carbon Budget and uncouples climate change policy from the annual budget statement. 7. The CCR Bill provides for the preparation of several plans whereas the JC suggested a single National Climate Change Strategy (including mitigation and adaptation measures) be adopted so as to ensure joined up and coordinated action. 8. The CCR Bill does not provide for the implementation of the ETS and other EU Directives adopted as part of the EU s package. 9. The CCR Bill, unlike the JC s proposals, does not provide the Oireachtas with powers to approve the various plans which are

6 EU and international that should be introduced in the light of this assessment. Requiring all significant public authorities and bodies to adopt a climate change statement which will set out the actions they will take to achieve the annual targets set in the NCCS. Setting framework conditions for the introduction of incentives to assist Ireland become a Low Carbon Economy. Determining the broad criteria for the allocation of revenue from the auctioning of ETS allowances and a portion of carbon tax revenue to the priority measures set out in the NCCS to reduce GHG emissions in the nontraded sector. These resources will be distributed through a Climate Change Dividend Fund under the auspices of the Office of Climate Change and Renewable Energy. Setting framework conditions for the deployment of electric vehicles, the installation of smart meters and energy efficiency retrofitting programmes. The implementation of the EU Directives on carbon capture and storage, on the promotion of the use of energy from renewable sources, and EU ETS where there is a shared competence. The criteria that should be used to determine the Government s approach to the use of CDM and Joint Implementation. envisaged.

7 The introduction of new measures and policies that may be agreed at international level post PART 1 Section 1 provides for the short title of the Bill and for its collective citation as the Climate Change Act, Section 1 provides for the short title of the Bill and for its collective citation as the Climate Change Response Act, Sections 2 and 3 contain definitions and makes the Taoiseach responsible for this legislation. Schedule 4 sets out the functions of the Taoiseach in relation to public bodies. Section 2 contains definitions and makes the Minister for Environment, Heritage and Local Government responsible for this legislation. Section 11 sets out the duties of public bodies in relation to the national/sectoral plan (s) in the performance of their functions. Ministers are given powers to direct such bodies. The Government has not accepted the JC s proposal that the Taoiseach should have overall responsibility for climate change. PART 2 - Targets Section 4 states it is the duty of the Taoiseach to ensure that the State s net carbon account for 2050 is at least 80% lower than the 1990 baseline; requires the setting of GHG ETS emission reduction targets agreed at EU level; in December 2008; permits the Taoiseach to set tougher targets based on agreements reached at international level or on the basis of scientific evidence, technological developments or national energy policy. Section 4 sets an annual reduction in net emissions (both traded and non-traded sectors) of 2.5% during the period 1 January 2008 to 31 December The target for 2020 is 40% and 80% by The Government, having consulted with the Expert Advisory Board (see Section7) may amend these percentage Both proposals support: 1. The same long-term GHG emission reduction target. 2. Changing the target in line with emerging new evidence.

8 amounts. Any such change will require Oireachtas approval. The Government s Framework Proposal envisaged a 3% per annum reduction. As ETS emissions are an EU competence and will be implemented on foot of Directive 2009/29/EC, it may not be feasible to set a national GHG emissions reduction target in primary legislation which includes ETS emissions. Section 5 sets energy and electricity efficiency targets in line with Ireland s commitments at EU level and allows for the setting of tougher targets if these are justified having regard to scientific evidence, technological developments or national energy policy. PART 3 Climate Strategy and Carbon Budgeting Section 6 requires that an Annual Climate Change Statement be presented to the Oireachtas by the Taoiseach and that this be accompanied by a Carbon Budget which will identify the indicative Exchequer resources that will be applied in each of the following five years to deliver national GHG emission reduction targets. The Carbon Budget will set the State s net carbon account for successive periods of five years beginning with the period 2008 to 2012; a 30% reduction lower than the 1990 baseline will be set by 2022; in certain circumstance (for example, the adoption of new EU Directives) the targets set in the carbon budget may be changed. Section 6 proposes that the annual carbon budget statement be replaced by an annual transition statement which will: record the policy measures adopted to achieve emission reduction targets; contain an assessment of the effectiveness of the measures; and record the policy measures adopted to enable the State to adapt to the effects of climate change and the effectiveness of such measures. The statement will include, for example, a record of emissions for the previous year and additional measures required where in effective The policy intent of both proposals is broadly similar i.e. putting the preparation of the annual Carbon Statement on a statutory footing and setting out the minimum content and purpose of the statement. The Framework Proposals went into more detail about the purpose of the annual Carbon Budget and the benefits of such a budget than did the JC report, but these proposals are omitted from the CCR Bill. The Framework Proposal specified:

9 Schedule 1 sets out the range of matters to be dealt with in the Annual Climate Change Statement, including carbon budgeting, forecast emissions, success or failure of mitigation measures, current and forecast activities of the Carbon and Climate Change Dividend Fund; progress in meeting energy efficiency standards in the national building stock; matters to be taken into account in setting carbon budgets; baseline reference years etc. The Taoiseach is also required to lay before the House the Government s proposals and policies for meeting the carbon budget. The Schedule also specifies what information must be provided in the statement e.g. the amount of the next carbon account for the year. There are also enabling provisions about a scheme for the registration and monitoring of carbon units. A cap of 40% is placed on the purchase of carbon credits from sources outside the State. measures have been implemented. The purpose of the annual Carbon Budget is to: Report on net GHG emissions and trends; Report on progress in implementing policies and measures in the NCCS, including impacts on emissions; Report on any significant policies and measures which have been implemented and have had a significant impact on net GHG emissions; Provide estimates of net GHG emissions which will result from any new or altered measures being introduced in the Budget which is considered likely to have a significant impact on emissions; Help in our efforts to increase public understanding of climate change and the Government s response; To be a clear measure of the progress made each year towards meeting our targets for emission reductions. The JC did not emphasise the role of the carbon levy in the annual Carbon Budget process to the extent that the Framework Proposal did, as follows:

10 The new Bill will incorporate the carbon levy process into the Carbon Budget. In setting or varying the rate of the levy in the Financial Budget, the Minister for Finance will be required to consult with the Minister for the Environment, Heritage and Local Government. The legal mechanism for setting or varying the tax will be the Taxes Consolidation Act 1997 (No. 39 of 1997) as amended by the Finance Bill. Again, this proposal did not find its way into the CCR Bill. It also appears that this transition statement will be distanced from the budget statement. This is not what the Framework Proposal envisaged (Section 5.3) as follows: Setting the trajectory towards the achievement of national and international targets over a specified time frame and placing this on a statutory footing, will bring certain benefits by: The Carbon Budget will be prepared at the same time as the Financial Budget, so as to demonstrate that carbon effects are now being taken into account in the Government s decisions on spending and taxation

11 measures and to demonstrate particularly to the business community, that the Government s decisions on climate change are consistent with overall economic and budgetary policy; Carbon proofing of Financial Budget: in line with a commitment in the renewed Programme for Government an estimate of the carbon impact of programmes announced in the budget will be included a report of the direct and indirect impacts on GHG emissions of the various activities covered by the financial budget will be prepared by the Minister for Finance and laid before both Houses of the Oireachtas. Section 7 requires that a five-year National Climate Change Strategy (NCCS) be prepared from 2012 (and for every subsequent five year period) to identify the measures required to reduce GHG emissions in the non-traded sector; to determine the public bodies responsible for implementing each measure; to allocate funds for each measure; for public consultation on the draft NCCS; for an annual review; and for the NCCS to be approved by the Oireachtas by simple majority. Sub-sections 4 to 7 set out the issues to be covered in the NCCS and the considerations that must be taken into account in preparing the Section 5 requires the Minister to submit a National Climate Change Plan (a national plan) to Government at least every seven years and to undertake periodic reviews. The plan must specify the policy measures required to achieve the emission reduction targets and to enable the State to adapt to the effects of climate change. The Government may request Ministers to The provisions are almost identical in terms of policy intent. The JC went further as regards requiring the NCCS to set out the allocation of resources needed to implement agreed measures. In addition, the JC proposed that the draft NCCS be subject to public consultation (which is now the Government s intention).

12 NCCS. prepare sectoral plans. In preparing these plans due account must be taken of matters such as the need to secure and safeguard economic development and competitiveness. Two plans are envisaged; a GHG national mitigation plan and a climate change national adaptation plan. There is a requirement to seek views on the draft national/sectoral plan(s) by way of public consultation. The Minister has an option to consult with the EAB. The Oireachtas has no role under the CCR Bill in approving or even debating the national plan. The CCR Bill merely requires that the plan be laid before Dáil Eireann. The JC proposal requires the Taoiseach to seek the advice of the Climate Change Commission; in contrast the CCR Bill makes this consultation optional in contrast to the Framework Proposal which stated: The CCC will formally advise the Minister in a published report on the content of the strategy, and will be available to meet the Government and Oireachtas to discuss their advice. It is also of note that following proposal in the Framework also is omitted from the CCR Bill: The Minister and relevant Ministers will be required to report on progress in the delivery of the strategy, including progress made by public bodies under their aegis, under the monitoring and reporting parts of the Bill (as set out in part 9 of the Framework). Section 8 provides for the laying of reports before each House of Section 5.11 gives the Minister the option of The JC s proposal, being mandatory, is

13 the Oireachtas containing an assessment of the risks for the State of the current and predicted impact of climate change. A National Climate Adaption Strategy is required to set out the Government s policy objectives in relation to adaptation to climate change and the programmes, policies and proposals for meeting these objectives. preparing a climate change national adaptation plan. stronger. PART 4 - Office of Climate Change and Renewable Energy another institutional issues Section 9 establishes the Office of Climate Change and Renewable Energy under the auspices of the Department of the Taoiseach. Schedule 2 sets down the functions of the Office and determines its role and responsibilities. The Office of Climate Change and Renewable Energy - to be staffed primarily by personnel from the EPA and SEI - will be responsible for: advising on national policy on climate change; supporting the negotiations at EU and at international level on climate change and renewable energy; preparation of the NCCS and the Annual Climate Change Statement and supporting Carbon Budget; implementing policy directions given to it by the Taoiseach; the monitoring and reporting of GHG emissions; setting criteria to determine the extent to which Ireland should rely on CDM, JI and domestic offsets; working in partnership with all relevant stakeholders and climate change experts; co-ordinating Ireland s R&D efforts to become a Low Carbon Economy; delivering and coordinating measures to give effect to Ireland s commitments to develop the renewable energy sector; advising the Commission of Energy Regulation in relation to climate change and renewable energy; and, for public communications on climate change and There is no corresponding provision. The JC proposals go much further than the CCR Bill in relation to a new institutional set up in relation to both climate change and renewable energy and new roles and responsibilities of the OCCRE. The Framework Proposal stated: The Committee (on Climate Change) will be supported by a new Office of Climate Change within the Environmental Protection Agency, and will report periodically, and on request on specific items, to the Cabinet Committee on Climate Change and Energy Security. In particular, it will have a formal role in relation to the National Climate Change Strategy and the Carbon Budget as set out above.

14 renewable energy. The Office of Climate Change and Renewable Energy will be staffed largely from personnel from existing State Agencies, including the Environment Protection Agency and Sustainable Energy Ireland. The closest possible coordination between these agencies will be needed. In addition, Schedule 2 sets out the detailed provisions about the role, membership and modus operandi of the Office, including its relationships with other public bodies and Departments. Section 10 establishes a Climate Change Commission. Schedule 3 provides that this independent body, with an expert board and chaired by a person of proven expertise, will have an advisory role and will be responsible for preparation of an impact assessment of the risks that Ireland faces as a consequences of climate change and of the adaptation and additional mitigation measures needed as a consequence. In addition, the CCC is empowered to issue reports and findings on climate change issues in the context of Ireland achieving its GHG targets, for example in relation to national policy on offsets. The CCC s reports are to be submitted to the library of the Houses of the Oireachtas. Schedule 3 also sets out provisions about the role, membership and modus operandi of the Commission. Section 7 sets up a National Climate Change Expert Advisory Body (EAB) to be supported by the Environmental Protection Agency. Subsections 2 to 15 set out the modus operandi of the EAB. Section 8 details the functions of the EAB which include making recommendations about: the preparation of a national/sectoral plan; policy issues relation to the reduction of GHG emissions; and adaption measures. Section 9 requires the EAB to submit an annual report to Government on progress made in achieving emission reductions and furthering transition to a low carbon climate resilient and environmentally sustainable economy. The report is also to include inter alia projections of future emissions and recommendations as to the most cost effective ways of achieving emission reduction targets. The roles and functions of the CCC and the EAB are broadly similar. The JC approach is that the CCC should be based outside current administrative structures; the CCR Bill sees it being an extension of the EPA. The JC proposed that the reports of the CCC be presented to the Oireachtas. The CCR Bill only requires that it report to Government. The CCR Bill is silent on how the EAB will interact with the Senior Officials Group on Climate Change, the Technical Advisory Steering Group, and indeed with the Cabinet Sub-Committee on Climate Change. The existing functions carried out by the Informal Expert Advisory Panel on Climate Change will be subsumed into the new

15 Section 10 requires the EAB to conduct a periodic reviews having regard to: the 5 th Assessment Report of the IPPC; to any significant developments in science or law; and to any other issues relating to the achievement of national GHG emission reduction targets. Committee. The Framework Proposal explained, as follows, the need for a Climate Change Commission (which has been transformed into an EAB): In developing the approach to proposed legislation consideration has been given to the further strengthening of the existing institutional arrangements through the establishment of a statutory based Climate Change Committee. The Committee will be supported by a new Office of Climate Change within the Environmental Protection Agency, and will report periodically, and on request on specific items, to the Cabinet Committee on Climate Change and Energy Security. In particular, it will have a formal role in relation to the National Climate Change Strategy and the Carbon Budget as set out above. Given the central importance of Government collectively, and sectoral Ministers individually, in leading necessary action to address climate change, the Committee will be required to play a wideranging advisory and supporting role to Government and Ministers. The CCC as proposed by the JC would be more independent than the CCC as

16 envisaged in the Framework Proposal. The JC envisages a much wider role for the CCC. Section 11 transfers policy responsibility for Ireland s Carbon Fund from the NTMA to the Office of Climate Change and Renewable Energy in order to ensure that there is full coherence, better policy integration and coordination about the role and responsibilities of the Carbon Fund. The NTMA will continue to manage the Fund and its activities. Corresponding changes will be made to the Carbon Fund Act Section 12 sets up a Climate Change Dividend Fund to be coordinated by the Office of Climate Change and Renewable Energy which will be responsible, in line with set criteria, for deciding on the most efficient allocation of revenues arising from the auctioning of EU ETS allowances and a portion of the monies collected from carbon taxation for measures which will enable Ireland achieve its GHG emission reduction targets and thereby meet its EU and international obligations. This Fund will be used by Ireland to meet its EU and international commitments in relation, for example, to the provision of finance to help developing countries combat climate change. PART 5 Supporting Measures Section 13 enables the Office of Climate Change and Renewable Energy, in consultation with the Department of Finance, to introduce and manage incentives and grant supports which are

17 designed to support the achievement of Ireland s emission reduction and renewable energy targets and to facilitate Ireland to become a low carbon economy. Section 12 sets framework conditions to promote projects and programmes that will have a measurable impact on Ireland meeting its GHG emission reduction and renewable energy targets. Among the programmes that will be actively supported by the Office of Climate Change and Renewable Energy are the following: the accelerated deployment of electric vehicles; the installation of smart meters; energy efficiency retrofitting projects; the more rapid and co-ordinated development of projects using renewable resources, including wind, tidal, ocean, solar, biomass, and biofuel energy. Section 15 introduces the possibility, in compliance with Ireland s EU commitments on climate change, and having regard to the advice of the CCC, for the introduction of domestic carbon offset schemes and the promotion of voluntary carbon offset initiatives. In particular, the introduction of an offset scheme based on forest carbon sequestration will be facilitated. The Carbon Fund will have power to acquire units representing emissions reductions and units representing removal of GHG from the atmosphere. There is no corresponding provision. Both the JC and the Framework Proposal shared the common aim of enabling the operation of domestic carbon offsetting schemes on a statutory basis. However, the CCR Bill is silent on the issue of domestic offsets and the making of Regulations about these offsets. The Framework Proposal referenced a study on the potential of such schemes to be completed quickly i.e. by mid The Framework Proposal also stated:

18 The proposed Bill will provide enabling provisions to allow for statutory based approval to the establishment, operation and regulation of such schemes or other trading schemes covering specific economic sectors or types of emission having regard to the criteria for examining the potential of such schemes as outlined in the NCCS. PART 6 Other Provisions Section 16 will allow the Office of Climate Change and Renewable Energy to bring forward for approval by the Oireachtas additional measures and schemes arising from Ireland s EU commitments following the conclusion of an international agreement on climate change in the period post Section 17 requires all public authorities and bodies listed to publish on an annual basis, and no later than March of any year, a statement of the actions that will be undertaken to achieve the annual targets set in the NCCS for which they are either responsible for or impacted by. These public bodies will also be required to respond to requests for information from the Office of Climate Change and Renewable Energy and the CCC. The Office of Climate Change and Renewable Energy is empowered to issue policy guidance to these public bodies. Schedule 4 deals with the functions of the Taoiseach relative to public bodies. Section 11 sets out the duties of public bodies in relation to the national/sectoral plan(s) in the performance of their functions. Ministers are given powers to direct such bodies. The JC went a step further in recommending that the OCCRE should be empowered to issue guidance to public bodies. The following proposals set out in the Framework Proposal did not find their way into the CCR Bill: 7.6 Statutory requirements may be placed on public bodies to assess the risks of current and predicted impacts of climate change on

19 their sector and to develop specific sectoral adaptation plans on an 8 year basis. 7.7 Local authorities may be given a coordinating role in relation to climate change adaptation activities within their functional areas. Section 18 implements Directive (2009/31/EC) on the geological storage of carbon dioxide. Section 19 implements Directive (2009/28/EC) on the promotion of the use of energy from renewable sources, including the preparation of a National Energy Efficiency Action Plan. Section 20 implements the provisions of Directive (2009/29/EC) amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community insofar as there are shared competences. Section 21 deals with the power to make regulations for the purposes of the Bill, including powers to transpose EU Directives, Decisions and Regulations into Irish law. Some Regulations must be approved by both Houses of the Oireachtas. Others will come into operation unless they are subject to a resolution disapproving them within a certain time. Draft regulations must be the subject of stakeholder consultation as considered

20 appropriate by the Office of Climate Change and Renewable Energy. Section 21 provides for the commencement of the legislation and miscellaneous provisions.