Funding a Just Transition

Fri, Jul 24, 2020

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Neasa on the need to ensure a sufficient scale of funding to face the challenge that the EU and, specifically Ireland, face in addressing the economic impact of Covid-19 and the unfolding climate emergency.



Neasa Hourigan TD: As has been stated a number of times, the figures involved in these Revised Estimates are large and denote the scale of the challenge we face in the coming months and years. Coupled with this is the considerable level of uncertainty with regard to the future of our economy, education system, health system and communities as the pandemic continues to play a major part in our decision-making. This will likely continue in the months ahead until a vaccine for the Covid-19 virus is made fully available. It is only right that the focus of the Government when agreeing spending and supports should be on providing a safety net to those grappling with difficulties during these times. It is in this context of challenge and uncertainty that we should seek to bring a rigour to our methodology in public spending. This is where developing our processes in respect of a just transition and the use of our future budgets, particularly available stimulus funds, will be important and keenly felt.

In March 2020, the National Economic and Social Council issued a report that considered the most effective and people-centred way of implementing a just transition. It recognised that governments around the world were trying to identify with the greatest possible certainty which sectors of their economies were most at risk of disruption from transitions over the coming decades. The pandemic is a microcosm of that work. The report notes that complex transitions were not occurring in isolation from other global trends and potential transformations, such as urbanisation, population growth and globalisation as well as the move towards a circular economy and increased protection of biodiversity, habitats and ecosystems. It also noted that societies and economies were becoming increasingly service oriented and urbanised. For Ireland, this will present a significant challenge. In the programme for Government, we committed to a just transition. As we end fossil fuel dependence and digital disruption and automation become more prevalent, we need to ensure that no one is left behind. This means creating economic opportunity through climate justice policymaking.

In considering the broad scope of these Estimates and some of the newly created subheads, and in light of the newly announced EU stimulus package, I was disappointed to see that the allocation for the just transition fund will be €17.5 billion, less than half of what was previously proposed. This is one of the supports that we will rely on to move towards a fairer and more environmentally responsible economy. The changes to the fund do not match the scale of the challenge that the EU and, specifically, Ireland face in the economic impact of Covid-19 or the unfolding climate emergency. In gutting the just transition fund, a small number of countries have decided that electoral politics back home matter more than EU solidarity. Poorer countries will pay the price for populist politics in wealthier nations.

Though itself one of the wealthier nations, this is particularly relevant for Ireland, given that there is considerable uncertainty around upcoming issues like the CAP reforms for farmers. We are asking farmers to play a big role in reducing carbon emissions, improving biodiversity and ensuring food security, but many of their farms are not big enterprises, meaning it is not clear how they will do this with much less support.

With these gaps in funding for a just transition and farmers, how will these activities now be funded? The need for such funding has not gone away. More than ever, it is important that we use the funding we are getting from the EU, including Brexit funding where appropriate, and our own borrowing to invest in public services and projects that will support these aims. As we vote through these Estimates and continue the discussions in respect of further supports, it is imperative that we get this right and instil a just transition in any and all legislative work. Will the Minister of State outline how, as Estimates continue to increase, we can stitch just transition decision making into our legislative work?

Minister of State, Patrick O’Donovan: I thank the Deputy. Instead of specific numbers that I would ordinarily be asked to respond on, she is asking more of a policy question in the particular context of what is happening at the moment. I do not disagree with what she has said. In recent years, we have seen different types of displacement in our economy, including in terms of what the future of jobs will look like. For example, there has been a climate change displacement in recent years, with the Government, society and communities realising that things will have to be done differently. We have seen displacement in terms of Brexit, where our country was jolted into considering how to manage our connectivity to and place within the centre of the EU. I mean connectivity in basic terms, for example, in the context of infrastructure. This does not even take into consideration the wider issue of how to connect ourselves to the EU while working with the UK, which will become a third country. There has also been digital displacement. As part of the national development plan under the previous Government, the then Minister for Business, Enterprise and Innovation, Deputy Humphreys, launched a specific fund in that regard to assist businesses, communities and individuals where there was going to be displacement. Over the past number of years, certain types of job have disappeared and will never return.

A just transition needs to happen in the midlands. Other communities will face challenges. For instance, the agriculture sector is facing challenges, which is spelled out in the programme for Government. The farming organisations, in conjunction with farmers, have taken to the concept of accepting change. Through various initiatives established by the Department of Agriculture, Food and the Marine, Teagasc and others in recent years, farmers have changed. Deputy Hourigan is right, in that we are trying to provide a food island not only for ourselves, but for the wider EU and beyond in the most responsible way. We are transitioning in that regard and must bring people with us.

To give the House the short version, the Department of Public Expenditure and Reform has a role in this matter. The largest part of that role will be the bilateral meetings that will run between now and the end of September between the Minister for Public Expenditure and Reform and individual Ministers and Ministers of State. Regard will have to be had of those elements that are spelled out in the programme for Government. The Government has already shown that it is adept at and up to doing so, but there will be a process of change.

Covid has been another major shock to us, but whether the displacement is in the just transition, farming practices, digital disruption, changed work practices or gender equality - Deputy Nolan raised that issue and I am sorry that I did not get a chance to respond to her, but I hope to revert to her in writing - our Department plays a central role in leading that. Every penny that passes through the State’s coffers must come through us. We are almost like a clearing house. Consequently, the policies adopted by every Department must come through us. We are not just accountants or financial types who only have regard for pounds, shillings and pence. We also have regard for the programme for Government and the legislative programme that the Government has laid out. The Department oversees that. We will work with Deputy Hourigan, Deputy Nolan and every other Deputy who has raised important issues to ensure that those matters are addressed over the coming years.