Social Justice Ireland has criticised the fact that the Government spends up to €4 billion every year on potentially environmentally damaging subsidies.

It says that this €4 billion would go a long way to supporting a Just Transition fund for those low income households in rural Ireland most affected by the implementation of the necessary changes to support climate action.

In a new research document published today, Social Justice Ireland says that Ireland will never achieve a Just Transition until development is sustainable socially, economically, and environmentally.

It also said that without sustainable development we will never achieve our national and international climate change targets.

The new document refers to official figures from the Central Statistics Office showing that between 2012 and 2016 about €4 billion per year in tax receipts was forgone through potentially environmentally damaging subsidies and taxes foregone.

Social Justice Ireland pointed out that these subsidies effectively cancel out 80% of all tax revenues collected through environmental taxes, such as the plastic bag levy or the carbon tax, and argued that the subsidies undermine any positive impact environmental taxes might have.

It also said that communities and regions most affected by Climate Adaptation could achieve a Just Transition if the exchequer revenue forgone through environmentally damaging tax breaks was used instead to help the rural communities most affected.

However, the CSO report referred to by Social Justice Ireland classifies any government subsidy or support as environmentally damaging if it is likely to incentivise behaviour that could damage the environment irrespective of its importance for other policy or social support objectives.
 

For instance it classed fuel allowances for low income households as a potentially damaging subsidy because they could result in increased greenhouse gas emissions through the unnecessary use of fossil fuels.

An alternative, according to CSO at the time, would be to use the money spent on fuel allowances for low income households to refurbish properties through improved attic, wall, floor, and window insulation grants that could greatly reduce the energy required to heat a dwelling.

The CSO analysis also included indirect subsidies including tax revenues forgone by the imposition of lower excise duties on diesel, kerosene, gas oil, aviation fuel, so-called green diesel and other fuel oil.

It classed most farm related subsidies and supports as potentially environmentally damaging. This included, not just direct farm support payments, but also revenues foregone by granting a zero rate of VAT for fertilisers, VAT refunds for farmers, agriculture capital tax relief, stamp duty relief for young farmers, and much more.

These are the support schemes and tax breaks accounting for the €4 billion that Social Justice Ireland says should be redirected to deliver a Just Transition.

Also included in the €4 billion targeted by Social Justice Ireland are direct government subsidies such as the transfer of €115 million from electricity consumers through a PSO levy to subsidise the burning of peat for electricity to maintain jobs in the midlands.

In addition, a total of €400 million per year in direct payments to lower income households for fuel, gas and electricity allowances are included on the CSO list of damaging subsidies that Social Justice Ireland would like to see re-diverted.

Sean Healy, Director of Social Justice Ireland said today that "While growth and economic competitiveness are important, they should be considered in the context of sustainability, using a framework for sustainable development which gives equal consideration to the environmental, social and economic pillars.

"There are many policy options available to Government to support Ireland's transition to a low-carbon economy without increasing the financial burden on low income households. This requires both political commitment and genuine engagement with stakeholders across a range of sectors."

Colette Bennett, Research and Policy Analyst with Social Justice Ireland said "Poverty is both a cause and effect of climate inaction. Ireland is the self-professed laggard in Europe on climate change, yet we have done little to make significant changes which would work towards a low-carbon future.

"For example, investment in increased green public transport would see an improvement in health, job productivity and wellbeing, as well as a reduction in harmful emissions."