The Irish Government published the Climate Action and Low Carbon Development (Amendment) Bill 2020 on 7 October 2020 (the October Draft). Click here to view our initial article which considered the key goals and provisions of this bill. On 23 March 2021, a revised bill called the Climate Action and Low Carbon Development (Amendment) Bill 2021 (the Revised Bill) was published, which the Irish Times reports as being “strengthened” from its previous iteration.
Overview and aim of the Bill
The Revised Bill will amend the Climate Action and Low Carbon Development Act 2015 to significantly strengthen the framework for governance of climate action by the State in order to realise our national, EU and international climate goals and obligations.
Article 3 of the Revised Bill has been amended to strengthen the “National Climate Objective”, which it defines as:
“The State shall, so as to reduce the extent of further global warming, pursue and achieve, by no later than the end of the year 2050, the transition to a climate resilient, biodiversity rich, environmentally sustainable and climate neutral economy.”
The wording in bold represents the additions made by the Revised Bill. The crucial amendment here is the introduction of the words “and achieve” by the hard stop falling at the end of 2050. This increases the strength of the obligations on the Irish State and sets a clear goal of a climate neutral economy by the end of 2050.
Key changes from the October draft
Following publication of the October draft, an intensive two month pre-legislative scrutiny was undertaken by the Joint Oireachtas Committee on Climate Action. Reflecting the strong consensus for increased ambition and enhanced climate action, the majority of the 78 recommendations proposed by the Joint Committee have been incorporated into the final text, significantly strengthening the overall Bill.
The main changes from the October draft are as follows:
The language has been amended to ensure obligations are clearly stated, and the relationship between the various mechanisms is also more explicit
In line with the Programme for Government commitment, the Revised Bill provides that the carbon budgets should provide a 51% reduction in greenhouse gas emissions by 2030
Carbon budgets and all plans must be consistent with the Paris Agreement and other international agreements
Significantly it provides that if a carbon budget emission ceiling is exceeded, all exceeded emissions will be carried forward to the next budget period, which will be reduced accordingly
Key principles such as just transition, climate justice and protection and restoration of biodiversity are matters to which the Government and the Minister for the Environment, Climate and Communications (the Minister) are required to have regard to when preparing the plans and frameworks that are required by the Bill, and
Public participation provisions are strengthened, with the Bill providing that for each of the relevant plans, strategies, and carbon budgets, the Minister will consult with the public
Limitation on State liability
Another addition in the Revised Bill is Article 2A, which seeks to limit punitive financial compensation being sought which would limit the State’s ability to fund climate action. All other remedies are still available and the obligations imposed by the 2015 Act remain justiciable before the Courts. If the Government or any public body fails to deliver on its required obligations, the courts may be asked to compel them to act.
Mechanisms for achieving the National Climate Objective
The policy instruments set out in the Revised Bill include:
A series of successive carbon budgets
Annual revisions to the Climate Action Plan
National Long Term Climate Action Strategy to be prepared every five years, and
National Adaptation Framework to be prepared every five years
The Revised Bill establishes a clear relationship, and requires consistency, between these policy instruments and the National Climate Objective. Local authorities will also be required to produce individual Climate Action Plans, for delivering climate emission objectives within their function areas.
The Revised Bill also provides for a set of principles which the Minister and Government are required to take into account when preparing, approving or adopting any of the statutory plans, strategies and sectoral emission ceilings. A failure to do so would likely result in such actions being overturned if challenged by way of judicial review.
Role of the Climate Change Advisory Council
The Minister and the Government, when preparing the annual Climate Action Plans and the National Long Term climate Action Strategy, shall have regard to any recommendations or advice of the Climate Change Advisory Council (the Council). The Government shall consult with the Council when preparing a sectoral adaptation plan.
The Council has a central role in the preparation and proposal of carbon budgets. This involves a system of successive 5-year, economy-wide carbon budgets starting in 2021, which are to be set on a 15-year cycle. This means that at any one time there will be a series of three carbon budgets which will be in effect, with the aim of providing medium term certainty on policy.
The Revised Bill contains a new requirement at article 6A(5) whereby the first two carbon budgets proposed by the Council shall provide for a reduction of 51% in the total amount of greenhouse gas emissions over the course of the first two budget periods ending on 31 December 2030, from the annual greenhouse gas emissions reported for the year ending on 31 December 2018. This represents a significant strengthening of the interim targets, and will ensure that the Bill once enacted will result in significant impacts on sectors within a relatively short period of time. The newly appointed Chair of the Council, Marie Donnelly has stated that the first carbon budget for 2021-2025 would be decided by the council “immediately” after the adoption of the new Bill.
Sectoral Emissions Ceiling
The Sectoral Emissions Ceiling refers to the maximum amount of greenhouse gas emissions that are permitted in different sectors of the economy during a budget period. Different ceilings may apply to different sectors. These ceilings may be revised from time to time by the Government.
The Revised Bill retains the concept of both "banking" and "borrowing" in relation to carbon budgets but these articles [6D(3) and 6D(4)] have been reworded for increased clarity. Where a sector comes within its allocated emissions budget, the surplus emissions can be carried forward for use in successive budgets. In circumstances where a sector exceeds its allocated emissions budget, the Minister shall carry forward the excess greenhouse gas emissions into the next budget period. The carbon budget for that period shall be decreased by the amount of greenhouse gas emissions that have been carried forward.In the October draft this carry-over had been limited to a maximum of 1% of the total carbon budget, but this limitation does not appear in the revised Bill.
In our previous article we noted that on publication of the Programme for Government, there was a commitment that the bill would include a section banning the sale of new petrol and diesel cars and the importation of second-hand petrol and diesel cars from 2030. The ban was excluded from the October draft to avoid a delay in publishing, given that these provisions would have to be notified to the European Commission in advance of its entry into force. It is interesting to note however that this ban has also not been included in the Revised Bill.
Impact on businesses
For Irish business owners and potential investors, this Revised Bill provides for a robust framework from which all future annual Climate Action Plans and carbon targets will flow. Given Ireland's emissions profile, we anticipate that the impact of this Revised Bill, when passed, will be borne most directly by businesses in the energy, transport, built environment and agri-food sectors.
However, Ireland’s 51% carbon reduction target represents a mammoth undertaking. The scale of the task was brought into stark relief by the fact that the unprecedented collapse in economic activity and mobility as a result of the COVID-related restrictions only resulted in a 6% reduction in emissions in 2020. It is therefore inevitable that the effects of the climate action regime will be felt across the entire Irish economy and society.
Regardless of the legislation, whether there will be the actual political and societal will to undertake such an unprecedented transformation remains an open question. In a recent article for the Irish Times, Pat Leahy commented "There is simply no way that climate action measures can avoid conflict with one of the most enduring principles of policymaking in Ireland - that nobody should be inconvenienced by anything. If that tendency endures, the climate action plan will never get off the ground."
Impact on Ireland
The Revised Bill represents a significant step-change in the governance arrangements for delivering on Ireland's legal obligations under the Paris Agreement and EU law to decarbonise the economy. It represents one of the central commitments of the current Programme for Government and will influence and impact legislation and government policy for the foreseeable future. The governance arrangements are designed to ensure that the legal obligation on the State and its institutions, to pursue the transition to a climate neutral economy, endures any changes in government.
Coming shortly after the seminal Supreme Court decision striking down the previous Climate Mitigation Plan under the 2015 Act, the Revised Bill will ensure that climate action is no longer something which is of a purely policy related nature. Instead it is firmly a domestic legal obligation which will permeate every aspect of the economy and society.
Many of the criticisms surrounding the October Draft centred on the fact that it did not go far enough in terms of the obligations on the Irish Government to achieve the goals outlined. These criticisms seem to have largely been addressed in the Revised Bill, particularly the crucial redrafting of the National Climate Objective itself to include the word “achieve”.
We are of the view that the Revised Bill is significantly stronger and clearer than the October Draft and is a landmark piece of legislation in pursuit of existing climate objectives. It provides a solid legal framework from which the more detailed policies will flow. It will, when enacted, provide a clear and important signal, across the Irish economy and internationally, that continued climate action is a fixture in the Irish policy landscape and that we are all required to play our part.
For more information and expert guidance in all related matters, contact a member of our Energy team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.