Check Against Delivery
Ministers, ladies and gentlemen,
Thank you all coming here at a critical time for climate action and sustainability. On behalf of the Government, I want to welcome our friends from:
- the OECD,
- the European Commission,
- the Global Environment Facility, and
- the International Fund for Agricultural Development.
And I want to extend a special welcome to our guests from the international financial institutions:
- the World Bank,
- the Asian Development Bank,
- the European Investment Bank, and
- the European Bank for Reconstruction and Development.
Your presence underlines the significance of today’s event. Today we are posing the specific question of how we can use savings to achieve our sustainability goals. The answers will help us face a challenge like other great challenges in history.
In every century there have been revolutions which have turned the world upside down. The industrial revolution in the 18th century. The digital revolution at the end of the 20th. I believe this century will be remembered in terms of the climate revolution. A world transformed because of what the European Commission has described as ‘the catastrophic and unpredictable consequences of climate change’.
At the same time, we have a sea change in public opinion, spearheaded by the younger generation, that I believe can help us put it right. The appetite for action and change is there. Just like the industrial and digital revolutions there are those who predict dire consequences like the loss of hundreds of thousands of jobs and destruction of wealth; the fall of nations.
I believe the climate revolution will create new jobs and new wealth: reduced imports and extra jobs all over Ireland as we shift to renewable energy. Indeed we may yet become an energy exporter. Vibrant, populated city centres with excellent amenities and transport as we embrace density. A greener and diversified agricultural and agrifood sector producing high quality, traceable food sustainably.
Climate change is the greatest challenge facing humanity today. It is a domestic challenge, a European challenge and a global challenge. No country on its own can stop it. So, all countries must act together. I believe the greatest responsibility we have is to pass on our planet to the next generation in a better condition than we inherited it.
We need to make changes now, before it is too late. They will not be easy. They will require us to change how we heat our homes, how we travel, whether we travel, and how our electricity is produced. Every individual, family, community and business will have to change.
In this country, we recognise that Government doesn’t have all the answers. So we will work with people, industry and communities to chart the best and most inclusive way forward. In particular, we will work with our farmers to modernise agriculture and reduce emissions from that sector, taking into account the need to protect their incomes and livelihoods, as well as the environment and rural economy.
Our approach will be to nudge people and businesses to change behaviour and adapt new technologies through incentives, regulations and information. Our objective, as we plan for the future, is to transition to a low-carbon and climate-resilient society. This will shape all our spatial policy decisions which affect where we live, where we work, and how we travel.
Last week, our lower house of parliament, Dáil Éireann, declared that we face a ‘climate emergency’. While in itself it does not reduce our GHG emissions, nor does it give us any new tools, power or resources to do so, it is deeply symbolic. It is now incumbent on all political parties to follow through with activities.
In our National Development Plan – Project Ireland 2040 - we are investing €21.8 billion over the next ten years to help this transition. €7.6 billion will come from the Exchequer and the rest will be non-Exchequer investment:
- Renewable energy;
- Electric vehicle infrastructure;
- Building insulation;
- Electrification of our railways;
- More buses;
- Better walking and cycling infrastructure;
- Rural broadband to encourage home working and reduce commuting.
I believe that securing investment from both the public and the private sectors is the only way of driving this forward. The only way to secure sufficient finance.
Later this month, the Government will agree an ‘All of Government Plan to Tackle Climate Disruption’. It will align with other work we are doing to create a sustainable and future-proofed economy in Ireland. Sustainable finance is at the heart of this. Let’s take one ambitious target and see how it might be achieved. We want the European Union to become carbon neutral by 2050. To do so, we need €180 billion in investment annually in energy and transport. This rises to €300 billion when you include other policy dimensions. If you add refurbishment of buildings to make them energy efficient, and other issues, it becomes even more than that.
That volume of funding at the EU level means that private investment will be needed. Public money won’t be adequate. At a global level, the IPCC estimates that the world needs to spend $900 billion annually in each year up to 2050 on energy investments to limit global warming to 1.5 degrees.
So we need a climate revolution to change how private sector investment is channelled effectively. From now on, investment decisions must consider the urgent environmental imperative. We must stop thinking about short-term performance when making financial decisions and instead become better informed and more responsible. To do this, we will need a unified classification system for determining what economic activities can be considered as environmentally sustainable.
The financial system must respond to climate change. The Governor of the Central Bank of Ireland, Philip Lane, recognised this when he analysed the challenges posed by climate change for the Irish financial system in his landmark speech at the National University of Ireland, Galway, in February. He recognised that the Central Bank can play a lead role in ensuring that financial firms incorporate climate change into strategic and financial plans, while also ensuring that consumers have sufficient information to navigate the financial risks posed by climate change.
Similarly, Mark Carney, the Governor of the Central Bank of England changed how we think about climate change and the financial system with his speech to Lloyds in September 2015. Recasting the familiar economic idea of the ‘tragedy of the commons’ he suggested the challenge of climate change is the ‘tragedy of the horizon’. If the time horizon for investments and their expected returns is shorter than the time horizon for their effects on our climate then we will all suffer the tragic consequences.
I believe we must align the financial world with the urgent and essential goal of reducing carbon emissions. As part of this work, our Minister for Finance is working with his counterparts across the EU and this work is a national and European priority. At the same time, we are striving to be a leader in the field at home. Last month, Minister Michael D’Arcy set out our new strategy for international financial services, and one of the priorities is sustainable finance.
The results of our work will not be seen in a year, or even in ten years. But if we succeed, they will be felt for generations. Climate change has raised the stakes to that level for our planet. It also creates opportunities for investment, wealth creation, new jobs and profits.
Thank you for joining us today and I wish you every success in your deliberations.