Thursday, 29 April 2004
Dáil Eireann Debate
27. Mr. O’Shea asked the Minister for the Environment, Heritage and Local Government if his attention has been drawn to concerns expressed by the ESRI that the Government’s recently announced proposals to reduce greenhouse gas emissions was self defeating because it rewarded dirty firms and encouraged them to stay in business; his response to the concerns raised by the ESRI; and if he will make a statement on the matter. [12215/04]
Minister of State at the Department of the Environment, Heritage and Local Government (Mr. Gallagher): I am satisfied that the Government has appropriately implemented the terms of Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the community and amending Council Directive 96/61/EC. This directive includes a requirement that at least 95% of the allowances being made available to installations are to be allocated free of charge.
Within these limits, the national allocation plan provides that 0.75% of allowances will initially be auctioned by the Environmental Protection Agency. The agency will also auction any unissued allowances from the new entrants’ reserve — 1.5% of allowances are being made available for this category — and from unissued allowances in respect of closed installations. These additional auctions will be subject to the overall requirement of the directive that not more than 5% be charged for and any allowances that cannot be auctioned will be cancelled.
I am satisfied that an appropriate balance under the terms of the directive has been achieved in Ireland and that emissions trading creates a market value on greenhouse gas emissions allowances that will internalise the environmental cost of emissions and set a powerful incentive for industry to become cleaner, with companies having to identify and implement emissions reductions measures at or below the prevailing market price. The ESRI concerns referred to in the question are essentially addressed to the provision of the EU emissions trading directive rather than to the method of implementing this by the Irish authorities.
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