The Assessment and Recommendations present the main findings of the OECD Environmental Performance Review of Ireland. They identify 43 recommendations to help the country make further progress towards its environmental objectives and international commitments. The OECD Working Party on Environmental Performance discussed and approved the Assessment and Recommendations at its meeting on 9 December 2020.
OECD Environmental Performance Reviews: Ireland 2021
OECD Environmental Performance Reviews
Assessment and recommendations
Abstract
1. Environmental performance: Trends and policy developments
Progress in decoupling the economy from the main environmental pressures has been uneven
Ireland is mostly a sparsely populated rural country, with several dynamic high-tech industrial clusters concentrated in sprawling urban areas. The export-oriented agro-food sector is based around dairy and beef production from grassland, and it makes a notable contribution to the economy and employment. Ireland hosts a large share of Europe’s remaining peatlands, which have been under pressure from peat extraction for electricity generation and domestic heating.
The global financial crisis plunged the economy into a severe recession in 2007-12. This affected environmental outcomes in two ways. Emissions of greenhouse gases (GHGs) and air pollutants, waste generation and material consumption declined during the crisis (Figure 1). However, the need for fiscal consolidation meant lower public investment in environmental protection and resource management (Section 3). This has slowed down progress. With the economic recovery and fast growth, environmental pressures have risen since the mid-2010s, although at a slower pace than the economy (Figure 1).
Figure 1. A mixed performance in delinking environmental pressures from economic growth
Ireland has made considerable progress towards the Sustainable Development Goals (SDGs) linked to poverty and inequality reduction, economic growth and jobs, education, cities and communities, industry and innovation. However, additional effort is required to pursue the SDGs related to climate, energy, water and biodiversity. Climate, circular economy and environmental policies have gained renewed impetus in recent years, with various well-designed policy initiatives. These need to be thoroughly implemented in a timely fashion to alleviate the growing pressures from demographic development, urban sprawl, road traffic and intensification of agricultural practices. As in other countries, the COVID-19 crisis has had some positive environmental effects. Ireland’s own history shows that early action is needed to steer the economic recovery towards low-carbon and circular patterns and avoid a rebound of environmental pressures. This would also make the economy and environment more resilient to future shocks.
The 2020 climate target appears out of reach despite the impact of the COVID-19 crisis
Ireland has one of the highest rates of GHG emissions per capita in the OECD and in Europe. It has an unusual GHG emission profile: agriculture accounts for more than a third of emissions, second only to New Zealand among OECD member countries. Biogenic methane emissions from livestock make up the bulk of these emissions. Transport, mostly by road, is the second largest emission source, making up 20% of emissions (Section 4). Only a quarter of Ireland’s GHG emissions are covered by the European Union Emissions Trading System (EU ETS); these are emissions from fossil-fuel based energy generation and energy-intensive industry. Under the EU climate policy framework, Ireland is required to reduce its emissions outside the EU ETS (i.e. three-quarters of its total emissions) by 20% by 2020 and by 30% by 2030 compared to the 2005 level.
Ireland’s GHG emissions declined markedly during the sovereign debt crisis. This allowed the country to meet the Kyoto Protocol target under the first commitment period (2008-12) (Figure 2). With the economic recovery, GHG emissions rose by 8% in 2014-18. In 2018, emissions were marginally above their level at the beginning of the decade. Provisional data for 2019 show a 4.5% decrease from the previous year, owing to lower power generation from coal and peat, reduced application of nitrogen fertilisers and lime on soils, and a warmer winter. This is the largest annual emission reduction since 2011. Nonetheless, in 2019, Ireland exceeded its annual non-ETS emission limit for the fourth consecutive year. It is unlikely to meet its 2020 target (Figure 2), regardless of the impact of the COVID-19 crisis (EPA, 2020a). Modelling suggests that the COVID-19 crisis led to a nearly 10% decline in overall GHG emissions in 2020 compared to a business-as-usual scenario (de Bruin, Monaghan and Yakut, 2020), which does not appear enough to meet the 20% reduction target by 2020.
Figure 2. Ireland can achieve the 2030 targets if it implements additional measures
Ireland has raised its ambition in transitioning towards a low-carbon economy…
The adoption of the Climate Action Plan in 2019 represented a major step forward in Ireland’s climate mitigation policy. The plan identifies the pathway to reduce GHG emissions in the sectors not covered by the EU ETS by 30% by 2030, consistently with the net-zero emission goal by 2050. It provides a strong signal to economic operators and households to drive future investment and consumption. The June 2020 Programme for Government raised the ambition to more than halving national emissions between 2021 and 2030. The Climate Action and Low Carbon Development (Amendment) Bill, under preparation at the time of writing, is expected to enshrine the 2050 climate-neutrality goal in law and to require five-year carbon budgets. New policies and measures will have to be identified to make the Climate Action Plan consistent with these more ambitious goals.
…but needs to consistently follow through on planned measures to meet climate targets
Engaging the private sector will be essential to deliver
Fully implementing the Climate Action Plan in a timely fashion would bring Ireland’s non-ETS emissions down by 29% in 2030 compared to 2005, close to the 2030 target (Figure 2) (EPA, 2020b). The emission drop linked to the COVID-19 crisis is not expected to substantially change the long-term outlook (de Bruin, Monaghan and Yakut, 2020). However, achieving the climate objectives is challenging. The plan’s implementation requires considerable investment and financial resources, but these have not been sufficiently assessed (EC, 2020). Given public finance constraints, mobilising the private sector and financial markets is crucial. Planned actions such as massive home retrofitting and expansion of the use of electric vehicles (EVs) (Section 4) call for households’ willingness to invest. Providing stronger price signals (e.g. via the carbon tax, vehicle taxes and road pricing) would encourage businesses and households to make low-carbon investment, production and consumption choices. Consideration should be given to affordability issues, employment impact and regional disparities (Section 3).
Ireland is not on track to achieve its 2020 renewables and energy savings targets
The country heavily depends on fossil fuels, including solid fuels, for both electricity generation and residential heating. It has committed to phase out coal and peat electricity generation by 2025 and 2028, respectively. About a third of active peat bogs have already been closed to extraction. The share of renewable sources in the energy mix has more than doubled since 2010, thanks to a rapid expansion of wind power. However, in 2018, renewables accounted for 11% of the gross final energy consumption, compared to the 2020 target of 16%. Ireland has vast potential for offshore wind, but the lack of a marine spatial planning and development consent framework for offshore facilities has hampered development (IEA, 2019). The Climate Action Plan aspires to reach 70% of electricity generated from renewables by 2030, nearly double the 2019 share. New support systems for renewable electricity and heat were launched in 2020 to help attract investment in the sector.
Energy use has been on the rise since the mid-2010s. Reducing energy use and GHG emissions from transport will require substantial changes in mobility patterns and land-use planning, in addition to a massive shift to EVs foreseen by the Climate Action Plan (Section 4). Several grant schemes have supported energy efficiency improvements in buildings and contributed to reducing energy use and related GHG emissions in the residential sector since 2010. However, per capita carbon dioxide (CO2) emissions from fuel combustion of households were still 52% above the OECD Europe average in 2018. New housing has increasingly moved away from oil boilers, but carbon-intensive fossil fuels (coal, peat and oil) provide about half of home heating in Ireland. The implementation of the near-zero energy building standard, as from late-2019, will help improve energy performance of new buildings.
The Climate Action Plan pledges to retrofit a third of the housing stock by 2030, install 600 000 heat pumps and upgrade the energy rating of all public sector buildings. In line with this commitment, the government budget for 2021 increased the funding for residential and community energy efficiency by over 80% compared to the previous year (Section 3). However, residential energy efficiency support programmes have targeted simpler and cheaper upgrades, which have already been implemented.
Reducing GHG emissions from agriculture remains a major challenge
Emissions from agriculture rose by 10% between 2010 and 2019 as the dairy herd and milk production increased. The implementation of the measures foreseen in the Climate Action Plan is expected to help bend the curve (EPA, 2020b). In 2019, the Department of Agriculture, Food and the Marine (DAFM) released a draft roadmap (Ag‑Climatise) to translate the plan’s targets into more detailed actions and targets for agriculture and land use. However, there are concerns over Ireland’s ability to reconcile increased agro-food production and exports with climate, air, water and biodiversity objectives.
Ireland’s approach to managing the carbon footprint and environmental impacts of farming (especially of ruminant livestock) has focused on increasing production efficiency. In addition to mandatory requirements, the policy mix relies on agri-environmental support schemes, guidelines and advisory services to encourage famers to improve their technology and practices, as well as herd genetics. However, the continuously increasing GHG and ammonia emissions, as well as water pollution from nutrients, suggest this approach needs to be strengthened to achieve further environmental improvements (EPA, 2020b; OECD, 2020a). Completing the policy mix with outcome-based support to farmers and pricing instruments could help improve effectiveness (OECD, 2020b). Transitionary compensation measures could help maintain income security and well-being of farmers. The government aims to triple the country’s share of organic-farmed land to bring it to the EU average of 7.5%.
Efforts to adapt to climate change impact have intensified
Ireland’s economic losses due to extreme weather and climate-related events were among the highest in the European Union – about EUR 1 000 per capita over 1980-2017 (EEA, 2019). The highest climate-related risks are increased frequency of storms and intense precipitation events, with associated flooding and damage to agriculture, the built environment and infrastructure. More than half of the population lives near rivers and coasts, where risks are the highest.
Ireland has made considerable progress in preparing for the impact of climate change. It adopted a National Adaptation Framework in 2018, followed by sectoral and local adaptation plans. These plans should be reviewed in line with the national climate risk assessment released by the Environmental Protection Agency (EPA) and the Centre for Marine and Renewable Energy in 2020. The web-based platform Climate Ireland provides information and practical guidance to help decision makers, adaptation practitioners and citizens plan for a changing climate and take preventive measures. In 2019, the EPA updated its guidelines on integrating climate factors, including resilience to climate-related risks, into strategic environmental assessment (SEA) of plans and programmes. The National Development Plan (NDP) 2018-27 includes public funding for investment in flood defence and enhanced infrastructure resilience. The private sector, including the insurance sector, should be more engaged in climate-proofing investment.
More progress is needed to meet the air emissions and air quality objectives
Emissions of major air pollutants, with the exception of ammonia, have declined since 2010 (Figure 1). This decline was partly due to the economic crisis and partly thanks to reduced use of coal and peat in power generation and residential heating, upgrade of power plants and renewal of the car fleet. However, after dropping at the beginning of the decade, emissions of nitrogen oxides (NOx) have stabilised. Reducing NOx emissions from transport has proven difficult; the benefits of improved technology have been offset by the increasing number of vehicles, especially diesel vehicles (Section 4). Ammonia emissions, mostly from increasing cattle population and nitrogen fertiliser use, have risen steadily since the early 2010s and are projected to continue rising.
The National Air Pollution Control Programme (forthcoming in 2021) will consider the Climate Action Plan, as many measures outlined in the plan (e.g. in the transport and residential sectors) will help reduce local pollutant emissions. Only full implementation of these measures, especially a shift to electric mobility, will bring NOx emissions below the 2030 target of the EU National Emissions Ceilings Directive. Compliance with the 2020 and 2030 ceilings for ammonia will require new measures in farming (EPA, 2020c). Such measures are expected to be included in the forthcoming DAFM’s roadmap Ag‑Climatise.
Air quality is generally good. However, in 2019, the EU annual average limit values for nitrogen dioxide (NO2) were exceeded in Dublin at one urban location due to traffic pollution. In the same year, concentrations of fine particulate matter (PM2.5) exceeded the World Health Organization (WHO) guideline value at more than a third of monitoring stations. This was mostly due to the burning of solid fuels in cities and towns (EPA, 2020d). The ban on the sale and use of bituminous coal (or “smoky fuel”) in selected larger urban centres (so-called Low Smoke Zones) has helped reduce pollution from particulates. In September 2020, the ban was extended to cover half of Ireland’s population. However, more determined action is needed to move away from solid fuels for heating, while considering fuel-poverty risks. Since 2017, Ireland has expanded its air quality monitoring network and modelling capacity remarkably. This has allowed it to identify where localised air pollution problems exist.
Waste management has greatly improved, but circularity could be further developed
The progressive increase of the landfill tax rate (EUR 75/tonne), together with limits on disposal of biodegradable waste, has contributed to diverting waste from landfills (Figure 3). In 2018, landfilling accounted for about 15% of treated municipal waste, less than half the OECD average. Ireland is on track to meet the 2020 EU target for landfilled biodegradable waste, but it may be challenging to reduce recourse to landfills further. Waste incineration with energy recovery has mostly replaced landfilling. Extended producer responsibility programmes have helped increase recycling of several waste streams and meet the related EU targets. However, increased incineration and composting may discourage recycling and prevent Ireland from meeting the post-2020 recycling targets (EC, 2019).
Domestic material consumption and waste generation increased with the rebound of the economy (Figure 1). Material consumption and municipal waste generation per capita are high in international comparison. Municipal waste recycling stagnated for most of the decade, and slightly declined in 2016-18 (EPA, 2020e). Only a minor share of materials is recovered and fed back to the economy, and a large share of waste is not properly sorted. In 2017-18, Ireland rolled out waste collection fee systems based on weight or volume of the waste collected. However, not all service providers apply differentiated fees to recycling or food waste bins. Ireland exports a large part of its waste for recycling, recovery or disposal due to infrastructure capacity constraints (EPA, 2020e).
Figure 3. Waste management has improved; quality of many water bodies is less than good
The transition to a circular economy calls for developing new recycling industries and secondary raw material markets to better use the stock of materials contained in waste. There is potential to better exploit synergies with policies in other sectors, including industrial and innovation policies, education and active labour market policies, and green public procurement. This is all the more important in response to the disruption of global trade caused by the COVID-19 crisis. A circular economy approach will help increase resilience of supply chains and self-sufficiency (OECD, 2020c). The Waste Action Plan for a Circular Economy (WAPCE) 2020-25 responds to the need for a more consistent approach to a circular economy in Ireland. It aims to mainstream the circularity concept in all economic sectors and includes a wide range of actions to encourage waste prevention, recycling and material recovery. A whole-of-government circular economy strategy and legislation were under preparation at the time of writing.
Inadequate water infrastructure and farming exert high pressure on water quality
Investment in water infrastructure has increased, but financing needs are high
Ireland has considerably improved its water governance with the establishment of Irish Water (the national water utility), the development of the River Basin Management Plan (RBMP) 2018-21 and the adoption of a water services policy statement and funding framework. The latter is based on a mix of government funding (for domestic services and capital investment) and user charges (for non-domestic services).1 The new institutional setting has made it possible to better identify investment and financing needs in the water sector and to re-launch much-needed investment in infrastructure and services.
The water supply and wastewater treatment infrastructure is ageing and needs to be upgraded. There is sporadic non-compliance with drinking water quality parameters, especially from small private suppliers that serve 20% of the population. Water losses of about 45% have resulted in high and increasing water abstraction for public water supply (Figure 1). A third of the population, mostly living in dispersed rural settlements, relies on independent water treatment systems, with variable performance. Despite infrastructure improvements, treatment in many agglomerations, including Dublin and Cork, still does not conform to the requirements of the EU Urban Wastewater Treatment Directive (compliance was required by 2005). Some smaller settlements continue to discharge untreated wastewater in the environment. The NDP 2018-27 commits to investment of about EUR 8.5 billion in public water infrastructure. This commitment appears sufficient to reduce water losses and bring Ireland in compliance with the EU legal requirements. However, meeting the water infrastructure needs of a growing population and economy will require a much higher investment (OECD, 2020d).
Ireland stands out among OECD member countries in not charging households for drinking water and wastewater services (OECD, 2020d). Domestic water charges were introduced in 2015 but were abolished a year later due to strong social opposition. Households that use water above a certain threshold will have to pay an excess use charge from 2022. In practice, the charge will apply to less than 10% of metered domestic households. These households account for almost 40% of domestic water consumption and their excessive use is supposed to be due to leaks. The new charge is expected to help reduce water losses and excessive consumption. The limited use of water charges implies the state budget covers the vast majority of water sector financing needs. The funding model may not be able to keep up with the scale of required investment.
Urgent measures are needed to improve water quality
Agriculture and inadequate wastewater treatment are the main drivers of declining water quality in Ireland (Figure 3). Organic pollution of Irish rivers and nutrient concentrations in groundwater bodies are among the lowest in the European Union. However, water bodies have suffered from increasing nutrient pollution. Nitrogen balance has been rising since 2011, together with livestock and nitrogen fertiliser use (Figure 1). Pressures from chemicals have also intensified, with some drinking water supplies exceeding pesticide limits (EPA, 2019). Initiatives such as the Local Authority Waters Programme and the Agricultural Sustainability Support and Advisory Programme appear to be contributing to some water quality improvement in selected priority areas (EPA, 2019). However, urgent measures are needed to address the causes of water quality deterioration, and particularly nutrient losses from agriculture.
There is scope to enhance effectiveness of biodiversity policy
Ireland has strengthened its biodiversity policy framework with the adoption of the Strategic Plan for Biodiversity 2011‑20 and the third National Biodiversity Action Plan 2017‑21. However, implementation challenges remain due to the variety of sectors that affect biodiversity (e.g. agriculture, fishery, wind energy) and the multitude of actors involved. Government transfers related to biodiversity, mostly for agri-environmental schemes, averaged nearly 30% of all public environment-related transfers in 2010‑18. However, funding that directly targets species and habitat conservation is limited. The declining conditions of habitats raise questions about the effectiveness of spending. An assessment of financial needs for biodiversity protection will be concluded in 2021. It is expected to support a public and private finance mobilisation plan. There is a need to extend the whole-of-government approach adopted for climate mitigation to biodiversity policy.
Little progress has been made in extending the protected area network
According to national estimates, nearly 17% of Ireland’s land surface and inland waters are protected, in line with the 2020 Aichi target. This percentage may be overestimated, as some terrestrial protected areas include marine and coastal waters. International sources, including the OECD and the International Union for Conservation of Nature, indicate that about 14% of the terrestrial areas are protected. Ireland completed its terrestrial Natura 2000 network under the EU Birds and Habitats directives, but site-specific conservation objectives and measures are lacking for many sites (EC, 2019). The vast majority of protected sites are privately owned and nearly 60% are farmed. Engaging land owners is, therefore, crucial to implementing effective conservation and restoration measures.
The marine Natura 2000 network is incomplete. Marine protected areas represent less than 2% of the country’s exclusive economic zone, far from the 2020 Aichi target of 10%. Little progress has been made in designing and implementing specific measures to achieve good environmental status of marine waters by 2020, as required by the EU Marine Strategy Framework Directive (EC, 2019). Most coastal waters are in at least good ecological status (Figure 3), but the share of bathing coastal sites with excellent water quality has declined. The June 2020 Programme of Government pledges to protect 30% of Ireland’s marine waters by 2030, as well as to complete a national marine planning framework and an overarching 20-year strategy to manage the country’s seas (Project Ireland Marine 2040).
The quality of key habitats has deteriorated
Agriculture, housing and infrastructure development, alien species and resource extraction are among the main pressures on Ireland’s biodiversity. While over half of assessed species were in favourable conservation status in 2013-18, only 15% of habitats (as defined by the EU Habitats Directive) had a good status. The conservation status of almost half of habitats is deteriorating (Figure 4). The national peatland programme has resulted in some recent progress in conservation and restoration of bogs. The COVID-19 recovery package launched in July 2020 and the 2021 Budget have allocated funds to peatland restoration (Section 3). However, Ireland should ensure that peat harvesting is compatible with the conservation of bog habitats (EC, 2019).
Figure 4. The conservation status of several habitats is of concern
Recommendations on climate, air, waste, water and biodiversity
Climate change mitigation and air quality
Fully implement the measures outlined in the 2019 Climate Action Plan in all sectors in a timely fashion; continue to promote broad citizen engagement in climate policy design and implementation, and provide stronger regulations and price signals to mobilise private sector low-carbon investment and consumption.
Set a target for biogenic methane emissions consistent with the climate-neutrality goal, as recommended by the Climate Change Advisory Council; work within the European Union to establish an emissions trading or similar system for agricultural GHG emissions.
Ensure that the roadmap for a low-carbon transition of farming and the agro-food sector strengthens coherence between production targets and climate goals, as well as with objectives related to air emissions, water quality and biodiversity; regularly monitor the roadmap implementation.
Establish a roadmap for accelerating the phase-out of fossil fuel boilers and the switch to renewable alternatives (biomass, biogas and heat pumps) for residential heating; introduce minimum energy efficiency standards in the rental sector to encourage renovation of existing housing units.
Ensure that grants for energy efficiency programmes in the residential sector target deep renovations, giving priority to the publicly owned housing stock (social housing), to most vulnerable households and most carbon-intensive residential buildings; systematically monitor energy savings resulting from retrofitting projects and assess cost-effectiveness of the energy efficiency programmes.
Accelerate the extension of the ban on bituminous fuels with a view to establishing a nationwide ban; consider expanding the scope of the ban to other “smoky” fuels (peat and wet wood) in selected locations, while helping people at risk of fuel poverty to shift towards cleaner heating fuels.
Circular economy and waste management
Thoroughly implement actions outlined in the Waste Action Plan for a Circular Economy Action Plan (WAPCE) 2020‑25, including the ban on single-use items, the extended producer responsibility obligation for all packaging producers, deposit-return schemes and the levies on virgin plastics in packaging and virgin aggregates in construction projects; systematically evaluate the implementation of the plan and its effectiveness.
Introduce a levy on the incineration and exports of reusable and recyclable waste, as foreseen by the WAPCE 2020‑25, and increase the landfill levy at the same time.
Mandate all waste service providers to set differentiated collection fees for unsorted, recyclable and organic waste.
Water quality and management
Accelerate investment in extending and upgrading water supply and sanitation infrastructure to ensure adequate wastewater treatment throughout the country, reduce water losses and make the water system resilient to climate change impacts.
Assess whether the funding model for water services is sufficient to cover the high investment costs and whether household water charges would be an appropriate financing source.
Ensure that independent wastewater treatment systems comply with environmental regulations; improve small-scale water supply systems (e.g. wells) to extend access to good quality drinking water.
Swiftly implement measures to address diffuse water pollution from nutrient losses; as part of the national strategic plan under the new EU Common Agriculture Policy, shift farmer income support towards agri-environment payments based on environmental outcomes, including reduction of nutrient losses, GHG and ammonia emissions; consider introducing pricing instruments to address nutrient losses from agriculture (e.g. charges on nutrient losses or water quality trading), accompanied by transitionary compensatory measures.
Biodiversity conservation and sustainable use
Finalise the designation of marine areas under the Natura 2000 network and accelerate the expansion of marine protected areas; put in place the necessary site-specific conservation measures at Natura 2000 sites.
Accelerate the restoration and management of raised and blanket bog habitats; support the afforestation and bog restoration efforts of local communities.
Develop and adopt the marine spatial planning framework as soon as possible, with a view to bringing coherence between the development of the ocean economy (including shipping, offshore wind energy and fishing) and sustainable use of marine biodiversity.
2. Environmental governance and management
Ireland implements good international practices in many aspects of environmental governance, including licensing, compliance monitoring and promotion, as well as providing access to environmental information. It has made substantial progress on most governance-related recommendations of the 2010 OECD Environmental Performance Review, from integrating environmental considerations into spatial planning to environmental democracy (OECD, 2010).
National and local environmental institutions collaborate well horizontally and vertically
The national-level institutional fragmentation of environmental policy making in recent years has been mitigated through increased co‑ordination using memoranda of understanding and advisory committees and groups. Co‑ordination between the main policy implementation actors – the EPA and local authorities – has been particularly effective. The EPA provides guidance to, and evaluates performance of, local authorities; the latter increasingly pool their resources and expertise through shared services on water, waste and climate change adaptation. Both the EPA and environmental services of local governments have enjoyed better funding since 2015 after a long period of budget constraints (OECD, 2020e).
The regulatory framework needs to be streamlined
The country has made substantial progress in aligning its legislation with EU directives and demonstrating compliance with them. The number of open infringements with EU directives has more than halved in the last decade, but problems remain with regard to water and biodiversity protection. The legal transposition has in many cases led to multiplication of laws and regulations addressing priorities of the day. Regulatory consolidation, already recommended by the 2010 OECD Environmental Performance Review, remains needed, particularly in the water domain. This process should be supported by regulatory impact assessment and the recently introduced ex post evaluation of legislation.
Environmental licensing has become more efficient but needs greater diversification based on potential impact
The EPA and local authorities institutionally separate the determination of licences for industrial and waste installations on the one hand and enforcement of their requirements on the other, avoiding potential conflicts of interest. The EPA reviews and revises all its licences when best available techniques are updated. The EPA has shifted the licensing process from paper to an electronic format, simplified notification and reporting from licensed facilities, centralised data flows and reduced the administrative burden on both regulated entities and the agency itself. However, even low-impact installations, with the exception of small-scale waste-handling facilities, require a bespoke permit. This imposes significant administrative costs on small businesses and local authorities that regulate them. Competent authorities charge substantial licensing fees, which do not, however, recover the respective administrative costs because their levels have not been reviewed in a long time.
A broad range of both infrastructure and facility projects require an environmental impact assessment (EIA) to get a development consent, whereas only facilities with a potentially significant environmental impact need an EIA to obtain a licence. However, a development consent can be granted even if an EIA is negative with regard to project location. This may lead to environmentally unfavourable sites for infrastructure investments, which do not undergo an additional environmental licensing process.
Strategic environmental assessment is widely applied in land-use and development planning
SEA is used to evaluate land-use plans, as well as a growing number of development plans and environment-relevant policies. Along with strategic flood risk appraisal and assessment of impact on biodiversity, SEA helps integrate climate change, biodiversity, nature conservation and green infrastructure aspects into land-use planning at the national, regional and local levels. SEA appears to be effective in promoting environmentally friendly policy approaches and solutions. However, many SEAs do not include sufficient analysis of alternatives, and environmental effects of plan or programme implementation are seldom monitored (González et al., 2020).
A 20-year National Planning Framework (NPF) was adopted in 2018 as a result of a large whole-of-government consultation and consensus. It aims to integrate climate change considerations into land-use plans at all levels. The Office of the Planning Regulator ensures that regional and local land-use plans are consistent with the national framework and promotes public participation in planning decisions. This helps promote coherent investment in sustainable transport, housing, water supply and sanitation services. The multi-annual investment plan NDP 2018-27 is aligned with the NPF spatial strategy (Section 3).
Compliance monitoring is getting stronger, but more effective enforcement is needed
Compliance assurance responsibilities are divided between the EPA and local authorities. A high share of inspections at both levels is based on systematic risk assessment of regulated activities. The growing sectoral focus of compliance assurance and the practice of multi-agency site visits increase the effectiveness and efficiency of inspections. In a rare practice among OECD member countries, the EPA and local authorities charge enforcement fees that recover up to 90% of inspection and enforcement costs from operators.
A lot of compliance monitoring information is available to the public: site visit reports, formal enforcement correspondence with operators, annual environmental reports and other environmental performance and self-monitoring reports of licensed facilities. The Network for Ireland’s Environmental Compliance and Enforcement brings together all key central government stakeholders, including the police and prosecutors, as well as local authorities. Together, they co‑ordinate compliance monitoring and enforcement, and exchange good practices.
However, non-compliance levels are relatively high (EPA, 2020f). Exceedance of emission limit values prescribed in facility licences is the main type of violations recorded at the national level, while waste-related offences are especially problematic at the local level. Administrative fines are available only for minor offences and have low fixed rates. Enforcement mostly relies on criminal law, imposing a substantial burden on the regulator. Criminal monetary penalties are capped at relatively low levels in the legislation and do not account for the violator’s benefit from non-compliance, reducing their deterrent impact.
Liability rules ensure environmental damage remediation but not for abandoned industrial sites
Ireland has an effective system for enforcing liability for, and remediation of, environmental damage from currently licensed operators. The EPA requires high-risk operators to make adequate financial provisions to cover the full cost of emergency response and remediation measures in case of an incident, as well as the cost of the facility’s eventual closure and decommissioning. As of March 2020, the EPA had accumulated a total of EUR 746 million in financial provisions. The EPA uses a risk-based approach in the assessment and remediation of contaminated land and groundwater at its licensed sites.
The government has a budget for remediating historic landfill sites that have been identified, risk-assessed and managed by local authorities. However, there is no specific legislation on contaminated land that would require the government to clean up abandoned contaminated industrial sites. This causes significant delays in their remediation.
Green business practices could be promoted better through public procurement
The EPA assigns high priority to promoting compliance and uses a wide range of information tools. It maintains a list of worst environmental offenders – National Priority Sites – to identify and put public pressure on industrial and waste management operators with poor environmental performance to change their behaviour. Several partnerships between the government and businesses (e.g. Origin Green and CirculEire) foster green business practices and a circular economy. Since 2017, Ireland has been implementing its second national plan on corporate social responsibility. The number of certifications to the ISO 14001 environmental management system (EMS) standard has been rising. Ireland also has a simplified, low-cost EMS certification scheme – EcoMerit – that targets primarily small and medium-sized enterprises (SMEs).
The government is promoting green public procurement (GPP) through its Green Tenders national action plan and subsequent guidance for eight sectors with clear environmental criteria. The government plans to include green criteria in all procurements using public funds by mid-2023. GPP progress reporting became mandatory for the central government in 2020. A reporting methodology to support this requirement is under development. GPP promotion is among the key government measures for the transition to a circular economy (Section 1).
Environmental governance is transparent and participative, with strong public outreach
Government authorities are obliged to proactively make environmental information publicly available, as well as to respond to information requests. The information dissemination tools include Ireland’s Environment portal, the Environmental Open Data Portal, the national Geoportal and the state of the environment report published every four years, as well as the new Environmental Performance Reporting online application. This ensures high transparency of Ireland’s environmental governance system.
The government has published public policy consultation guidelines for its departments and local authorities as part of the Open Government Partnership National Action Plan. Public participation is also a central element of EIA, licensing and planning decisions. The EPA engages actively with civil society, a recent example of which is the National Dialogue on Climate Action. Among other efforts to deepen public engagement, the 2019 Climate Action Plan envisages establishing a community outreach programme to drive change at the local level.
The public and non-governmental organisations have broad legal standing to ask for judicial review on planning and environmental matters. They can also intervene via the courts to ensure enforcement of environmental requirements. In line with good practice in several OECD member countries, the government intends to create a Planning and Environmental Law Court – a dedicated division of the High Court with specialised judges – to speed up the relevant judicial process. However, high litigation costs are a barrier in access to justice, and provisions for financial assistance with court fees are limited.
The government has integrated environmental and sustainable development education into curricula at all levels, from childhood to postgraduate education. The Green Schools and several awareness-raising programmes operated by the National Trust of Ireland promote climate action and environmentally friendly behaviour among students, teachers and the wider community. The EPA is active in environmental outreach in waste prevention, water conservation and energy efficiency.
Recommendations on environmental governance and management
Streamline and consolidate national environmental legislation, particularly in the area of water, while expanding the use of ex post assessment of laws and regulations.
Make EIA conclusions, if negative, binding on development consent decisions; continue to improve SEA practices through appropriate consideration of alternatives and monitoring of environmental effects of plans and programmes.
Reduce the administrative burden on competent authorities and small enterprises by developing activity-specific standard requirements (general binding rules) for more categories of facilities with low environmental impact.
Introduce variable administrative fines to decriminalise less serious environmental offences; increase the deterrent effect of monetary penalties by assessing and recovering economic benefit of non-compliance.
Adopt legislation on remediation of contaminated land and establish provisions for cleaning up abandoned industrial sites, including appropriate financing mechanisms.
Make GPP mandatory for public authorities and implement regular GPP monitoring and reporting.
Facilitate access to justice by following through with the plan to establish a Planning and Environmental Law Court and providing financial assistance for public litigation on environmental matters.
3. Towards green growth
Ireland is a small, open economy whose population has enjoyed growing well-being levels. Determined structural reforms and fiscal consolidation helped Ireland emerge from the 2008 global financial crisis and start to recover in 2012/13. Economic growth outpaced the OECD average in the second half of the 2010s, until the COVID-19 pandemic hit the world economy in 2020. The economy is projected to contract by 3.2% in 2020. It is forecast to start recovering only in mid-2021 and expand at over 4% in 2022, although the pace of the recovery remains uncertain (OECD, 2020f).
While Ireland has an extensive suite of policies addressing the SDGs, it needs to strengthen the linkages among these policies to achieve the goals cost-effectively by 2030. There are concerns over the country’s effective capacity to deliver on its ambitious plans for the transition to a climate-neutral and circular economy. The scale of the investment needs is remarkable, while additional sizeable fiscal spending is required to support the economic recovery from the effect of the COVID-19 pandemic. There is a need to mobilise the private sector and financial markets, increase efforts on eco-innovation, provide stronger price signals and remove harmful subsidies to encourage businesses and households to take action, while taking into account affordability, employment impact and regional disparities.
The COVID-19 crisis is an opportunity to make the economy greener and more inclusive
In response to the COVID-19 pandemic, the government provided support measures for an unprecedented EUR 24.5 billion in 2020 (7% of 2019 gross domestic product [GDP]). Recovery support measures amounted to about 30% of the overall fiscal effort. These were grouped under the July Stimulus Package, which explicitly aimed to protect employment and prepare for a greener and more digital economy. Work started in 2020 to develop a set of well-being indicators for policy design and evaluation, with a view to capturing the economic, social and environmental dimensions of the COVID-19 crisis and the recovery.
Some measures of the July Stimulus Package can be considered green, although it is difficult to quantify the balance between green and non-green spending. About half of the capital investment of the package was environment- and climate-related (EUR 250 million or 3.5% of the stimulus). The package provided funding to accelerate existing investment plans on sustainable transport and energy efficiency retrofitting that could be delivered quickly. These would create job opportunities in the construction sector, while contributing to reducing GHG emissions (OECD, 2020g). A multi-year peatland rehabilitation programme also received funding. The programme aims to create “green” jobs in the Midlands, where peat bogs have been closed to extractions. The package also allocated resources for skill training in emerging sectors (e.g. retrofitting) and higher incentives to purchase bicycles for commuting to work. However, the environment-related conditions to access support were relaxed in some cases. Examples include some support to farmers (OECD, 2020h) and the loans under the Pandemic Stabilisation and Recovery Fund.
Ireland has stepped up capital investment for the low-carbon transition …
In line with OECD guidance (OECD, 2020c), the budget for 2021 put a strong focus on investment for the green and low-carbon transition and increased the carbon tax (see below). About a third of the EUR 10 billion investment envelope was allocated to, among others, sustainable transport and water infrastructure, energy efficiency and renewables, landfill remediation and peatland rehabilitation. However, the government did not meet its commitment of a two-to-one spending ratio of sustainable transport over roads (Section 4).2
Ireland developed a sound multi-annual investment framework. The policy initiative Project Ireland 2040 outlines the country’s development strategy. Its implementation is expected to help achieve the SDGs. As part of Project Ireland 2040, the NDP 2018-27 commits around EUR 30 billion (or more than a quarter of the NDP outlays) to addressing the climate and energy transition. To better consider climate objectives in public expenditure, the 2019 Public Spending Code revised the shadow costs of GHG emissions to be used in public investment appraisal. The in-depth review of the NDP, to be completed in 2021, provides an opportunity to further align investment priorities with the goal of a just transition to a climate-neutral and circular economy by 2050. Ireland should use the EU Recovery and Resilience Facility in line with these objectives.3
… but investment needs remain high
The NDP is a response to the significant underinvestment during, and in the aftermath of, the economic recession. Subdued investment affected the quality of national infrastructure, especially in the transport and water sectors, and slowed down progress towards climate and environmental quality objectives (Section 1). The recession hit environmental protection investment harder than total investment in the economy. Investment to provide environmental protection services more than halved in 2008-12. It subsequently grew but less quickly than total investment; in 2017, it was just above half the pre-crisis level (Figure 5).
Figure 5. Environment- and climate-related investment and transfers have recovered
In line with a change in policy priority, there has been a marked shift in the allocation of environment‑related transfers (to businesses, households, public bodies and international environmental organisations) from the typical environmental protection activities (e.g. biodiversity conservation, waste management and wastewater treatment) to resource management activities, and particularly to subsidies for renewable power generation and energy savings. The amount of transfers to air and climate programmes has grown more than ten-fold (Figure 5). In 2020, the central government’s climate-related capital and current expenditure increased by 23% from the previous year to reach 3% of total budget expenditure. The bulk of the expenditure targets transport and agri-environmental payments. Ireland is one of the few EU countries to have started green budgeting practices to identify climate-related expenditure.
However, Ireland has not managed to sufficiently mobilise private investment. In 2017, the share of environmental protection investment in total business investment was less than 0.1%, the lowest in the European Union. The public sector accounts for more than 85% of investment in environmental protection (mostly wastewater management), compared with 40% on average in the European Union. Public financial support should target investment that would not occur otherwise, with a view to enhancing cost‑effectiveness of public spending and effectively leverage private investment. This is the intention of the Climate Action Fund, although it is too early to assess its outcomes.
There is scope to foster eco-innovation and expand green markets
Higher investment is also needed to spur climate- and environment-related innovation. Ireland has a sound innovation system and highly educated human resources. It has been increasingly investing in research and development (R&D). However, both government and businesses spend relatively little on R&D.4 Less than 2% of government R&D outlays were directed to environmental and energy research in 2019, among the lowest shares in the OECD. By comparison, 13% of government R&D outlays focused on agriculture, which may include research projects to improve the environmental performance of the sector. This R&D effort should be further channelled towards the decarbonisation of agriculture. Half of the energy public R&D budget targeted renewable sources in the second half of the 2010s, with a strong focus on ocean technology. Low environment-related R&D spending has translated into a relatively low number of patents in environment-related technologies compared to the OECD average. Nevertheless, Ireland has specialised in some green technologies such as those related to waste management, soil remediation and climate change mitigation for buildings.
Several organisations provide funding for climate-related research in Ireland. The Climate Research Coordination Group aims to improve co‑ordination between relevant funding organisations and to offer a platform to exchange knowledge and disseminate research findings. There is scope to enhance co‑operation between firms and research bodies to develop and deploy environment-related technologies and applications on a commercial basis. There is a sizeable disparity in innovation capacity and activity between multinational enterprises and domestic SMEs. Investment in environmental and low-carbon technology and innovation can pose a higher financial burden on SMEs. However, large enterprises manage to claim most of the public R&D support, which is primarily channelled through tax credit.
Nonetheless, Irish SMEs have been increasingly active in resource efficiency and circular economy measures. In 2017, the environmental goods and services (EGS) sector grew faster than the whole economy, although it contributed less than 1% to GDP and exports – among the lowest shares in the European Union. The sector is dominated by waste management, renewable energy and energy efficiency, which reflects the policy emphasis on these sectors (Section 1). These are also the EGS activities where employment is the highest. Employment in the EGS sector more than doubled between 2013 and 2017, to reach some 2% of total employment. The development of the bioeconomy and the circular economy provides considerable opportunities for Ireland’s businesses and can greatly contribute to job creation, as does investment in energy efficiency.
Ireland needs to maintain the commitment to a just transition
The transition to a carbon-neutral economy is expected to have a modest negative net impact on employment in Ireland over the next decade. However, the impact will be concentrated in small areas and communities. This will likely exacerbate regional disparities and affordability issues. The most immediate impact arises from the commitment to phase out peat harvesting and peat-generated electricity in the Midlands by 2028 (NESC, 2020).
Systematic dialogue with the affected communities and active engagement of local governments would help customise the just transition measures to local needs and build consensus. This is even more important in the context of a post COVID-19 recovery. The 2019 appointment of a Just Transition Commissioner is, therefore, welcome. The Commissioner has a mandate to engage with relevant stakeholders in the Midlands region and advise the government on possible policy measures. The Just Transition Fund for the Midlands (EUR 11 million in 2020) provides financial support for retraining workers and projects that can generate sustainable jobs in the region (e.g. building retrofitting, peatland rehabilitation, tourism projects and development). The fund is partially fed by the carbon tax receipts.
Progress has been made in greening the tax and subsidy system
Ireland introduced a carbon tax in 2010, and has gradually extended its coverage to include all fossil fuels. The tax rate was increased from EUR 20 per tonne of CO2 in 2019 to EUR 33.50 per tonne of CO2 in 2021. The government committed to continue increasing the carbon tax each year to reach EUR 100 per tonne of CO2 in 2030. This is a welcome announcement. A credible future trajectory of carbon prices will provide incentive for low-carbon consumption, investment and innovation without immediately imposing the burden on households and recovering firms (OECD, 2020g). However, even if the tax rate increases are implemented as announced, it will be challenging to achieve the targeted 51% reduction in overall GHG emissions from 2021 to 2030.
The government committed to use the revenue from the carbon tax increase (EUR 9.5 billion over ten years) to prevent fuel poverty, ensure a just transition of displaced workers and finance climate-related investment. In line with this commitment, the government allocated part of the carbon tax revenue to enhance some social welfare schemes in 2021. This is expected to mitigate the impact of the carbon tax on vulnerable households and even contribute to reducing poverty (O’Malley, Roantree and Curtis, 2020). Such earmarking of revenue can help create political support for the tax increases, but it may limit the flexibility of public authorities to adapt public spending to changing needs.
The introduction of the carbon tax has helped address the negative environmental externalities related to coal and peat use. It has also partially contributed to aligning the tax rate on diesel to that of petrol. However, motor fuel tax rates continue to give an incentive for using diesel vehicles, with potentially negative consequences for local air pollution and human health. A cap on diesel prices for road hauliers limits their incentives to purchase more fuel-efficient vehicles or EVs, and to adopt more fuel-efficient driving habits and logistics systems (Section 4). As from 2023, the taxable value of the benefit-in-kind (BIK) employees receive from the personal use of company cars will increase with the CO2 emissions of the vehicle. However, the tax rules can encourage unnecessary driving because the taxable BIK value declines with distance driven for business purposes.
The recent introduction of a NOx element in the motor vehicle registration tax is a welcome development. However, it only addresses the first registration of the vehicles in Ireland, not the use of existing vehicles. There are preliminary indications this measure has contributed to reducing the share of diesel vehicles in new vehicle registrations. However, the tax rate applied for high-emitting vehicles seems quite high compared to the estimated damage costs of NOx emissions, the abatement incentives in other sectors and the rates applied in other countries.
The attainment of Ireland’s ambitious target of almost 1 million EVs by 2030 is costly with policy instruments that are primarily focused on generous purchase subsidies (Section 4). The planned increase in the share of EVs will also contribute to a significant loss of public revenues from motor fuel taxes and motor vehicle purchase taxes, as the latter are linked to the CO2 emissions of the vehicles (OECD/ITF, 2019). There is a need to shift road transport taxation from a focus on fuel use to road use over the medium term. While also raising needed revenues, such road pricing could help better address distance-based externalities, such as pavement wear and tear, accidents and congestion.
Ireland has made progress in phasing out wasteful fossil fuel subsidies, as recommended by the 2010 OECD Environmental Performance Review. However, tax exemptions and rebates continue to apply to fuels used in agriculture, fishery and freight transport. Ireland extended the carbon tax to coal and peat in 2013 and discontinued support to peat-fired electricity generation in 2019. Vulnerable households benefit from a fuel allowance during winter to help with heating expenses. The allowance tends to support use of fossil fuels, which are the main source of residential heating (Section 1). It is a means-tested lump sum that is not required to be spent on heating. However, the name of the allowance is unfortunate and may have some undesirable behavioural effects. For example, recipients may be more inclined to spend it on polluting fuels and not encouraged to invest in energy efficiency.
Ireland’s support to agriculture follows the EU framework and is largely decoupled from production or input use. However, some agricultural input benefits from favourable tax treatment, which can encourage their inefficient use. Farmers benefit from a tax relief for the increase in the carbon tax rate on farm diesel. This is in addition to the income tax deductibility of costs of agricultural diesel as business expenses, and results in a double tax deduction. Fertilisers and animal feeds are exempt from the value added tax (VAT). Removing the VAT exemption on fertilisers would help reduce fertiliser use (Morgenroth, Murphy and Moore, 2018), with benefits in terms of GHG and ammonia emissions and water quality (Section 1).
Recommendations on green growth
Greening the economic recovery
Maintain the stringency of environmental requirements, including to access financial aid, during the COVID-19 crisis; as the recovery gains ground, consider linking future support for businesses and households to meeting environment- and climate-related requirements.
Promoting low-carbon investment, eco-innovation and green jobs
Ensure the revised NDP continues to prioritise investment in low-carbon transport infrastructure and energy efficiency, and to promote eco-innovation and reduction of the carbon footprint of agriculture, in line with the goal of a climate-neutral and circular economy; identify evaluation mechanisms and indicators to assess the effectiveness and environmental outcomes of the plan.
Increase government spending on R&D related to environment, climate and low-carbon energy solutions; extend direct funding instruments to encourage eco-innovation in SMEs; establish a national database of environment- and climate-related research to improve co‑ordination and efficiency of public research funding.
Customise the just transition measures to the local needs by: i) offering targeted skill and entrepreneurship training programmes to affected workers; ii) promoting green business opportunities and supporting SMEs; iii) providing targeted social benefits schemes to vulnerable households (e.g. for switching to cleaner heating fuels); and iv) ensuring widespread access to adequate infrastructure and services.
Greening the tax and subsidy system
Maintain the commitment to progressively increase the carbon tax rate; continue to provide carefully designed compensation measures targeted at the most vulnerable parts of the population.
Increase the diesel tax rate gradually so that it at least reaches the petrol tax rate in the medium term; phase out the current price cap for diesel used by road hauliers as soon as possible; assess whether the tax rules on company cars encourage substantial unnecessary driving and, if so, consider correcting the system.
Consider if the NOx element in the motor vehicle tax appropriately reflects the social costs of NOx emissions, especially as regards high-emitting vehicles.
Prepare to shift the focus of road transport taxation from fuel use to road use over the medium term through road use pricing based on geographic information systems, which consider where and when the driving takes place and the type of vehicle driven.
Establish a process to systematically screen actual or proposed subsidies and tax provisions to identify those that are not justified on economic, social and environmental grounds; develop a plan to phase out fossil fuel and other environmentally harmful subsidies.
Remove the VAT exemptions on fertilisers and animal feeds and the tax concession on fuel used for farm operations, while recycling the revenue to support general agricultural services or to individual farmers (on the basis of farm size and type); consider introducing a tax on pesticide based on toxicity of the active ingredient.
Consider rebranding the fuel allowance and providing it to eligible households during the whole year with a view to fully delinking it from heating fuels.
4. Sustainable mobility and freight
Ireland’s mobility patterns and trends are a source of rising environmental pressures
Ireland’s strong economic growth led to increased movement of people and goods in the second half of the 2010s. The country’s dispersed settlement pattern and low population density led to road transport being by far the dominant transport mode for both passenger and freight movement (Figure 6). Prior to the COVID‑19 outbreak, projections indicated that, in the absence of strong policy action, population and sustained economic growth would further increase demand for transport, together with related emissions of GHGs and air pollutants.
Ireland has taken positive steps towards reducing environmental damage from mobility. It has implemented a CO2- and NOX-based vehicle taxation system (Section 3); provided generous grants for the purchase of EVs; committed to higher investment in rail, public transport and active mobility; and improved co‑ordination between land-use and transport planning. However, implementation challenges have often impeded achieving expected results. Ireland needs to move at a faster pace and implement additional travel demand management measures to reduce reliance on private vehicles.
Decarbonising transport is essential to meet national long-term climate mitigation goals
The transport sector plays a key role in meeting the binding target of cutting non-ETS emissions by 30% by 2030. It is the second largest contributor to GHG emissions after agriculture, and accounts for more than a quarter of Ireland’s non-ETS emissions. Private car use accounts for more than half of transport-related GHG emissions and commercial vehicles account for more than a quarter. GHG emissions from transport, particularly on roads, have been only relatively decoupled from economic growth (Figure 6). They increased with the recovery of the economy from the financial crisis; in 2019, they were 13% above their 2000 level. Emissions from cars and freight are expected to rise until at least 2023. Projections suggest that full and timely implementation of the additional measures identified in the 2019 Climate Action Plan could bring transport GHG emissions 42% below their 2005 level by 2030 (EPA, 2020b; see Section 1).
Projections do not account for the impact of COVID‑19. The pandemic has significantly affected the transport sector, with both passenger and freight transport activity sharply declining in 2020 from measures to contain the pandemic. The pandemic is estimated to have reduced transport CO2 emissions by more than 20% in 2020 compared to a business-as-usual scenario (de Bruin, Monaghan and Yakut, 2020). Medium- and long-term effects of the COVID‑19 crisis on GHG emissions are, however, unclear and are subject to changes in mobility patterns. As of September 2020, Dublin car traffic, for instance, had gone back to 75% of pre-lockdown levels, while public transport use had only returned to 50%. It is also not yet clear how the growth in teleworking will affect housing and transport demand in the long term.
Figure 6. Ireland’s heavy reliance on road transport has led to growing GHG emissions
A growing number of diesel vehicles threatens air quality
Ireland’s motorisation rate is below the EU average, yet car ownership among households has been showing an upward trend. As in many other European countries, the car market is skewed towards diesel vehicles (with 57% of registered passenger cars being diesel in 2019). A shift to diesel-engine vehicles has been largely a result of historically lower tax rates on diesel than on petrol, as well as the change from engine-based vehicle taxation to a CO2-based system in 2008 (Section 3). The increasing preference towards diesel cars has contributed to improving fuel efficiency and reducing the average CO2 emissions from newly registered passenger cars to one of the lowest levels in the European Union. However, this trend, as well as an increasing share of second-hand vehicles, has raised concerns over urban air pollution. In Dublin and other major urban areas, concentrations of NO2 and PM2.5, partially caused by traffic, exceed WHO guideline values and are a risk to health (EPA, 2020d). The addition of the NOX component to the vehicle registration tax in 2020 is projected to reduce the share of diesel and second-hand vehicles in new registrations (Section 3).
Ireland needs to better manage car use in urban areas
Better incentives are needed to manage travel demand
The combination of several policy distortions has encouraged growing car use and exacerbated car dependency. This trend has generated associated problems of GHG emissions, air pollution, noise, traffic injuries and congestion. Although recent years also saw increases in the use of public transport, cycling and walking in urban areas, private cars accounted for about three-quarters of all trips in 2019 (DTTAS, 2019). The under-pricing of the use of urban space and of the external costs of car use has contributed to increased driving and peak-hour traffic, with congestion costs estimated to reach EUR 2 billion per year by 2030 (DTTAS, 2017). Parking policy in Irish cities, which entails high rates for curbside parking, has helped discourage car trips to specific destinations. However, other hidden car use subsidies, such as free parking at a workplace, provide implicit incentives to commute by car.
Except for the Dublin Tunnel, Ireland does not use road use charges to manage travel demand. The government believes that limited availability of public transport would make the introduction of fiscal or regulatory policy instruments (such as congestion charges or low-emission zones) unfair and socially unacceptable. However, other countries have overcome public scepticism and minimised equity implications, by accompanying fiscal measures to manage travel demand with investments in improved public transport (ITF, 2018). Any form of demand management should be aligned with policies that improve public space and liveability by enhancing travel conditions for pedestrians, cyclists and public transport users. This is important especially to ensure that post COVID-19 recovery does not result in additional urban car traffic.
Congestion charging remains one of the most efficient demand-side instruments to curb peak-time congestion, as the experience of other countries shows. To minimise distributional impacts, revenue from charges could be used to improve public transport and active mobility infrastructure. Additionally, income support provided to vulnerable and car-dependent households could help address equity concerns. Effective communication and implementation of a charging system on a pilot basis could help gain the population’s confidence, while showcasing the benefits of the policy.
Reallocating road space to public transport, cycling and walking should be a priority
Historically, Ireland has catered to the growth in the number of cars by planning and building roads and parking spaces. This has resulted in “induced demand”, with increases in road capacity leading to additional traffic. Heavy congestion and inadequate road design and management practices affect public transport performance, reliability and attractiveness. The 2013 Design Manual for Urban Roads and Streets requires the design of streets to facilitate sustainable mobility. Recent national, regional and metropolitan transport strategies have committed to road space reallocation, including proposals for bus, cycling and walking priority schemes. However, these projects have progressed slowly or been delayed.
The COVID‑19 crisis and associated physical distancing requirements imposed additional constraints on the use of space. Due to public health concerns, public transport use may decrease in the short term. This means that other modes will need to accommodate trips previously made by public transport. Ireland needs to progressively reallocate space to allow for physically spaced walking and cycling, while strengthening measures to manage excess post-confinement car traffic, to ensure that “displaced” trips are made by sustainable modes. In line with this goal, a COVID‑19 Interim Mobility Intervention Programme seeks to turn the heart of Dublin City into a priority zone for walking, cycling and public transport. In June 2020, the government issued guidance for the National Transport Authority and local authorities, requiring them to align the works done to address immediate public health concerns with longer-term sustainable mobility objectives.
Ireland needs to increase investment in rail, public transport and active mobility
Roads have received the bulk of land transport funding, although the gap has narrowed more recently. In 2019, for example, public transport accounted for 35% of budget outlays for land transport (DTTAS, 2019). The NDP 2018-27 allocated more than EUR 10 billion to advance major infrastructural projects, increase capacity of rail services and support the transition of the public transport fleet to lower emission vehicles. However, the National Roads Programme 2018-27 still identifies a number of major road construction plans with limited attention to the potential role of high-quality rail links to achieve inter-regional connectivity. Ireland needs to prioritise investment in public transport, cycling and walking infrastructure; road investment should be limited to necessary maintenance and construction of small-scale town bypasses. Ensuring regional links through public transport can help free up bottlenecks on existing roads and overall promote a move towards more sustainable travel.
In line with these objectives and recommendations of the 2017 Citizens’ Assembly, the June 2020 Programme for Government commits to two-to-one spending on public transport over roads. It also commits to allocate 20% of the transport capital budget for cycling and pedestrian projects, which signals a welcome increase in funding towards more sustainable modes. The government also plans to further develop the Local Link services in rural areas (mix of scheduled bus lines and on-demand services) to reduce car dependence of rural communities. Following the COVID-19 crisis, public transport faces additional challenges related to reduced capacity, social distancing rules and economic downturn. Ireland should plan to increase funding for public transport as part of the resumption of full economic activity.
Co‑ordination of land-use and transport planning has improved but requires stronger enforcement
Urban sprawl and low-density development have locked in unsustainable travel patterns. This has created places that lack adequate public facilities, have diminished liveability and, crucially, are dependent on private cars for long commutes, particularly into Dublin and other cities. Ireland has been moving towards more effective co‑ordination of land-use and transport planning to maximise efficiency of urban transport. The 2018 NPF and statutory planning guidelines promote compact growth and the regeneration and densification of urban settlements. However, development projects often remain car-centric in practice. They are frequently located on the fringes of cities, far from transport links or services, with foot and cycle paths limited to the area around the dwellings. Many areas suffer from a legacy of poorly connected street networks and inadequate pedestrian/cyclist facilities. There is a need to further tighten and enforce planning regulations, while ensuring they reflect priorities of improving accessibility to jobs and services, rather than increasing movement.
Ireland could enhance the cost-effectiveness and fairness of its EV promotion strategy
The main pillar of Ireland’s strategy to curb GHG emissions from the transport sector has been to increase the share of EVs in the vehicle stock. However, there are trade-offs in terms of congestion and non-exhaust particulate emissions (tyre, break and road wear), as EV promotion goes in the direction of fostering car ownership and use. To achieve the target of almost 1 million EVs on Irish roads by 2030 (including about one-third of all cars), Ireland has introduced some of the most generous subsidies for the purchase of EVs in the OECD. These include: a purchase grant, vehicle registration tax relief, a toll incentive, a home charger installation grant and reduced motor tax rates. Ireland has also invested to expand the network of EV charging points across the country. However, in 2019, electric and plug-in hybrid electric cars accounted for less than 1% of total stock of passenger cars in Ireland and the charging network remains small.
The cost for the public budget of the EV support has grown significantly. It is expected to grow further as the shift towards EVs will reduce revenue from fuel excise and vehicle taxes (Section 3). Despite being high, the EV purchase grant does not cover the price differential between an EV and a conventional car. Hence, they tend to benefit mostly wealthy households, which can afford to bridge the price gap. On the other hand, the level of taxation of conventional cars is not sufficiently high to encourage a shift to EVs. The experience of other countries shows that a successful and balanced EV promotion strategy needs to complement purchase subsidies with travel demand management measures (such as congestion charging and low-emission zones), higher taxation of internal combustion engine vehicles (ICEVs) and a more extensive charging network.
A more comprehensive approach is needed to address the environmental and climate impact of freight transport
The logistics sector also plays a vital role in achieving GHG emissions targets, as emissions from freight are set to increase up to 2030. To reduce environmental impacts of road freight transport, the government has been exploring use of alternative fuels, with a focus on compressed natural gas (CNG) and liquefied natural gas. The 2019 Budget introduced an accelerated capital allowance programme for gas-fired commercial vehicles and refuelling equipment to encourage their uptake as an economic and environment-friendly alternative to diesel (IEA, 2019). The government is also assessing the impact of installing CNG refuelling stations and setting up a large-scale renewable gas injection point on the gas network. However, when all tank-to-wheel emissions (including methane and nitrous oxide) are considered, the GHG effects of CNG are only comparable to best-in-class diesel. In the long run, freight electrification could make significantly higher contributions to the low-carbon transition.
Given that developing low-carbon solutions is particularly challenging in the freight sector, a comprehensive and dynamic policy agenda for decarbonising the sub-sector is needed. The Irish road freight sector is fragmented with small enterprises operating on a tight margin. Potential exists to accelerate collaboration between businesses, and thereby improve logistics efficiency and contribute to reducing CO2 emissions. However, with issues of competitiveness at stake, promoting standardisation and sharing of assets have proven difficult.
Ireland has a limited capacity and usage of rail for freight transport, as the small scale of the domestic market is insufficient to justify large-scale capital expenditure. However, Ireland should consider the potential for switching some activity to rail freight. Some ways to increase rail freight include carbon or tax credits for shippers and reduction of track access charges to make rail more competitive with road freight.
Improving climate resilience of transport infrastructure remains a challenge
Ireland developed an adaptation strategy for the land transport sector, focusing on the potential impact of more intense rainfall and increases in groundwater levels. Transport Infrastructure Ireland and Irish Rail have standards and procedures to address climate issues in the planning, development and operation of infrastructure. Climatic factors have been factored into the design standards of national roads for several years.
However, as in other countries, there is a need to prioritise, fund and climate-proof assets across the network given uncertainty about climate and socio-economic changes. Ireland needs to identify assets where disruptions could be critical and that would require investment in improved resilience. To date, Ireland lacks criteria to identify and subsequently prioritise investment in adaptive capacity. Such criteria should consider the social, economic and environmental functions performed by each asset. Information and quantitative data on climate hazards, exposure and network vulnerabilities will be required to inform regional risk assessments and the development of climate-resilient infrastructure. Ensuring climate resilience of individual assets is not sufficient. This should be embedded within a strategic approach to infrastructure network planning that accounts for the direct and indirect effects of climate change (ITF, 2016). In addition, improved understanding of potential cascading impacts between sectors would allow for identification of sectoral assets critical to the functioning of other sectors. This would require better inter-institutional co‑ordination.
Recommendations on sustainable mobility and freight
Prioritising public transport and active mobility
Ensure that national investment programmes prioritise sustainable mobility; follow through on the commitment to two-to-one spending on public transport over roads and an allocation of 20% of the total transport capital budget for cycling and pedestrian infrastructure projects.
Use road space allocation to proactively manage traffic by changing the road layouts, giving more space to cyclists, pedestrians and public transport; put in place significant investment and timetabled targets to support implementation.
Enforce planning regulations systematically and thoroughly at the local level to ensure that all developments promote compact settlements with easy access to transport links and include a network of safe walking and cycling routes.
Managing travel demand
Consider introducing policy instruments such as congestion charges to better manage travel demand in urban areas and curb increasing congestion, particularly in the Greater Dublin Area; consider a pilot implementation and clearly communicate the public benefits of any reform to increase social acceptability; assess potential distributional impacts of the introduced measures and mitigate them by providing direct support to the most affected and vulnerable households.
Address availability of parking, including by phasing out parking subsidy in the form of free parking at a workplace and encouraging employers to provide parking cash-outs in lieu of a parking space; make public transport and emerging transport services (such as bike sharing) eligible for commuter benefits; consider allowing employers to make tax-free payments to employees who walk or bike to work.
Promoting the uptake of electric vehicles
Increase the taxation of purchases and use of ICEVs, with a view to equalising the difference in purchase price or lifetime cost between EVs and ICEVs; continue to extend the charging points across the road network.
Shifting to low-carbon freight transport
Develop a coherent strategy for the low-carbon transition of the haulage sector, focusing on integrating road freight, rail and shipping and rebalancing economic incentives in favour of rail freight; in the road sector, improve efficiencies of logistics operations and introduce sectoral standards, such as mandatory eco-driving training.
Assess the economic efficiency and environmental effectiveness of the policy promoting CNG technology to reduce environmental impacts of road freight transport.
Improving climate resilience of transport infrastructure
Fill the information gap about exposure and vulnerabilities of transport infrastructure to climate hazards and assess the social, economic and environmental functions performed by all transport infrastructure assets; based on these data, conduct a full priority impact assessment to identify critical national assets and costs of adaptation actions to justify investments in improved resilience.
References
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Annex 1. Actions taken to implement selected recommendations from the 2010 OECD Environmental Performance Review of Ireland
Source: OECD Secretariat based on country submission
Notes
← 1. The water sector funding model is based on the 2017 recommendations of Joint Oireachtas (Parliamentary) Committee on the Future Funding of Domestic Water Services and the Water Services Act.
← 2. The 2021 state budget allocated EUR 1.8 billion to public transport and active mobility and EUR 1.3 billion to roads.
← 3. Ireland will benefit from nearly EUR 1.3 billion in grants in 2021-23 from the EU Recovery and Resilience Facility and EUR 176 million under the Just Transition Fund, in addition to more than EUR 1 billion for cohesion policy in 2021-27. The Recovery and Resilience Plan needs to be submitted to the European Commission by the end of April 2021.
← 4. Gross domestic expenditure on R&D was 1.1% of GDP in 2018, or half the EU average. However, this indicator is affected by the disproportionate weight of capital assets and earnings of foreign-owned businesses on Irish GDP.