Green New Deal Workshop
th Tuesday 16June, 2009
thOn 16 June 2009 Comhar SDC hosted a half-day workshop on the theme of “Green
New Deal” (agenda in Appendix 1). The purpose of the workshop was twofold:
; To facilitate a discussion with stakeholders and experts on the elements for creating a
Green New Deal
; To help Comhar SDC formulate policy recommendations to Government in relation
to a Green New Deal for Ireland
There were 32 participants, all with a professional interest in the subject of the Green New Deal.
Welcome and Introduction
The Chairman welcomed everyone to the workshop and outlined the work of Comhar and the focus it was giving to the Green New Deal. Participants were then invited to briefly introduce themselves.
Eoin McLoughlin, Policy Analyst of Comhar SDC, provided an overview of the work
that was currently underway on the Green New Deal (GND) in Ireland. The GND has been included as part of Comhar‟s three year Work Programme. The Comhar Secretariat has established an Ad-Hoc Working Group on the GND with the first phase of the project being to provide a clear vision of what a GND means for Ireland and deliver concrete recommendations for action. A proposed definition of a GND was presented to include three objectives: (1) revive the Irish economy and generate employment opportunities through building an innovative sustainable low-carbon society (2) reduce fossil fuel use and ecosystem degradation (3) redress the failings of our financial and governance systems and provide for greater social inclusion. In addition, seven priority areas were identified to include the following: (1) improving the energy efficiency of existing housing stock (2) scaling up renewable energy (3) redesigning the national grid (4) providing sustainable mobility (5) public sector investments (6) skills and training (7) building green infrastructure. The case was made for effective policy instruments and the right institutional arrangements to be put in place to deliver the GND. The use of public and private financial instruments was also identified as having a crucial role to play in funding the transition to a sustainable low carbon society.
John Woods, Director of Friends of the Earth Northern Ireland, provided an update on the work that has been happening on the Green New Deal in Northern Ireland. There an informal coalition of organisations has been brought together by the social partners and already held several meetings to develop ideas relevant to Northern Ireland. Core elements of their programme include (1) improving the energy efficiency of the housing stock (2) improving the energy efficiency and facilitating the development of renewable power in public and commercial buildings (3) supporting the development of renewable energy supply (4) improving the sustainability of transportation (5) maximising the opportunities in sustainable industries (6) maximising local employment by having the right skills in place. Different financing options are being examined including equity, “pay as you save” scheme, energy services and a rates surcharge. The group plans to present their work to Ministers at the Economic Development Forum this week and to build political support for the implementation of a Green New Deal for Northern Ireland.
Paul Killeen, from the Earth Systems Institute, presented some ideas and thoughts on how to make innovation happen for Ireland. An important consideration is how to bridge the gap between academic research and enterprise. The ESI Innovation Strategy is all about preparing for the sixth wave of innovation which is ecological sustainability. The Vision is to develop informed sustainable solutions for a green economy through working with partner organisations. The Systematic Innovation Lab is located in UCD and is set up to provide all the processes and tools to enable people to execute innovation via collaboration between technical and business people (researchers, students & industry partners). This should provide one means of bridging the gap from research to innovation. Some other possibilities include disseminating market and business knowledge by providing business mentors and entrepreneurs in residence. The use of education in order to teach students how to fish and the creation of possible alumni start-ups are further ideas.
Micheal Lehane, Programme Manager in the EPA, presented the results of some work that they had carried out on research and innovation for a Green Economy. The EPA has the overall remit for coordinating environmental research in Ireland and manages the national funding in this area on behalf of DEHLG. The most recent strategy is STRIVE which covers the period 2007-2013. Key measures under this programme include sustainable development, cleaner production and environmental technologies and a healthy environment. Since 2005 the EPA has invested ?30m in supporting the
development of the Environmental Technologies Sector. The results have been promising and benchmark very favourably against European and U.S. figures. The Cleaner Greener Production Programme has also focused on adopting cleaner approaches for business and received recognition under the EU review of Eco-Innovation Programmes.
The timeframe for the Programme for Government and how outputs from the work on the Green New Deal can feed in to this process is an important consideration. The policy alternatives and supports should also be put in place so that the agriculture sector can contribute more substantially to environmental sustainability. The role of CAP payments and modulation has an important role to play in this regard. The use of public procurement to drive forward change and provide a market for green products and services should also not be underestimated. One of the hurdles identified as posing a threat to the Green New Deal is the difficulty in obtaining finance for green tech projects. This relates to a lack of understanding by the financial community in how to assess these projects and the perception that they are of a higher risk class. The Green New Deal will require a paradigm shift if such problems as these are to be overcome. A possible approach to take is to initially select one or two instruments that are deemed the most essential in unlocking the door. These can then be split between those at the earlier development stage of innovation and the more established technologies that are ready for deployment.
World Café Session
The second part of the workshop consisted of three parallel breakout sessions focusing on key aspects of the Green New Deal. These dealt with what should be the priority areas for the Green New Deal along with the policy instruments and financing options required to bring it from concept to reality. The following is a brief synopsis of the discussions that took place.
Session One – Priority Areas
Attendees – Feargal Naughton, Micháel Lehane, Bartley O‟Connor, Duncan Stewart, Jim Kitchen, Mark Bennett, Tony Owens
Facilitator – Noel Casserly
This session considered what should be the „priority areas‟ for Ireland in terms of the
„Green New Deal‟. Much work has been undertaken on this by other countries around the world with funds having already been committed to some of the following areas:
; Energy efficient buildings
; Low-carbon vehicles
; Public transport
There is a clear need to bridge the gap in terms of linking R&D and emerging technologies to commercialization. Ireland should be looking to develop an export market in green technologies and use our traditional skills base as the foundation for making the transition. The IDA should also have a focus in attracting FDI to Ireland in this area.
What are the short-term priorities?
We should start in sectors where we already have inherent advantages. Job creation must be at the forefront of the Green New Deal and calculations should be made to quantify these where possible. The agriculture resource in Ireland could be used towards supporting the implementation of a Green New Deal and at the same time enhancing rural development. Agri-food and tourism sectors are very important and offer significant potential for green jobs. Capacity building in terms of developing the skills and training is required along with suitable indicators.
Greater energy efficiency and upgrading the existing thermal efficiency of housing stock should also be a short-term priority. Building Regulations are a key driver for this. However, bottlenecks need to be identified for both the commercial and residential sectors and actions put in place to alleviate these. One option would be for a task force of key stakeholders to identify how best to advance a national programme of upgrading the existing building stock.
Other priorities include maximizing the potential of resources we already have in the areas of wind and wave energy along with pursuing micro-generation and the use of smart grids.
The Government should be leading the way through the implementation of green procurement processes across the public sector. The ideal policy framework to have in place is a carrot and stick type approach. This could include the use of a levy escalator or smart carbon tax. Above all else, there needs to be clear direction and policy certainty provided by government with the recognition that we need to act now.
Session Two – Making it Happen
Attendees – Frank Corcoran, Fred McDarby, Graham Clarke, Ronan MacNioclais, Jon Healy, Therese Murphy, Frank Groom, Emer Dunne
Facilitator – Cathy Maguire
This session focused on the policy instruments needed to be mobilised in order to make the transition to a more sustainable economy. This included the use of existing policy instruments as well as considering the introduction of new policies and measures.
Such policy instruments included the following:
; Direct Expenditure
; Tax Expenditure
; Green Procurement
; Preferential Pricing (Feed-in Tariff)
; Environmental Taxes (Carbon Tax)
The two main elements that were identified as being missing from the above list are:
; Marketing and communications
; Implementation of current policy and legislation
Much of the discussion focused on the green tech sector and opportunities associated with that area. The need to think in terms of the value chain was identified. This means having policy interventions at the front end as well, creating demand and supply for both products and services.
The issue of pay back time for companies was raised and that pay back periods of 6-7 years would be unattractive to companies who may not be certain they would still exist at the end of that period. Taxes and capital allowances could be used to shorten the pay back time of investing in energy efficiency and green technologies.
What are the most effective policy instruments to be mobilised?
It was agreed that the most effective policy instruments to be mobilized included the following:
; Tax reform, including hypothecation and how revenue is used
; Skills and training
Skills and training needs to be targeted at different groups such as the unemployed, employed and third level sector. These should be linked to incentives for industry to engage in schemes. The example of the Dutch scheme was given where companies who have had to downsize to a four day week send their employees on training courses for the fifth day and this is funded by the Government so the employee salary doesn‟t change and they gain new skills that are needed for the transition.
What are the short-term priorities?
In the short term, the following key measures were identified as having the most impact and potential:
; Green procurement guidelines and implementation
; Skills and training – grid upgrade and retrofitting
; Tax and subsidy reform
; Marketing and communications
There seems to be a lot more thinking and consensus going into the longer term needs to develop the green tech sector and realign the economy. Therefore, in terms of value added, Comhar could focus more on identifying the actions that are needed now and could be implemented this year.
There are a lot of good things happening, just not on a large enough scale. Comhar could do a short analysis of the bottlenecks in key sectors/priority areas, particularly in the building sector and categorise these as actions that should be undertaken to release current capacity.
Comhar should look to develop a plan for selling the green new deal in cooperation with colleagues in N.I. and GB so as to build momentum and consensus around the actions required. This will have the aim of creating a broad stakeholder consensus that creates the political space for politicians to take this forward.
Session Three – Financing Options
Attendees – Frank Convery, Hugh Campbell, Jessica Benson, Joseph Curtin, Pat Finnegan, Tom Fitzgerald, John Woods, Raymond Sexton
Facilitator – Eoin McLoughlin
This session focused on possible financing options to provide funding for a Green New Deal. This included the use of existing financial instruments as well as considering the introduction of new measures.
Such financing options include the following:
; Fiscal Policy
; Green Bonds
; EU Funding
; Equity finance
; Venture capital
; Pension Funds
; Clean Energy Banks
; Domestic offsets programme
; Direct Expenditure
It was suggested that the costs of doing nothing (opportunity costs) should also be included in the analysis along with the use of tax-based investment schemes.
What are the most effective policy interventions?
; Should use the tax system to provide tax breaks for clean tech
; Need to target bankers who can release equity/finance
; Should talk with financiers and ask them what is needed to make clean tech projects
; Should set up a dedicated mutualised institution to drive this forward
; Should examine current fiscal policy and look to expand instruments such as the
R&D tax credit
; The system should be made to work for the man in the street
; The use of fiscal policy allied to bonds. Fiscal revenues should be used to create the
National Decarbonisation Fund that issues national and local bonds.
What are the short term priorities?
There is a need to organize a dedicated session around the area of financing the Green New Deal. This should cover all the different aspects of financing and the role each instrument has to play.
There needs to be a paradigm shift in the mindset in order to unlock the door. Currently green tech projects are not deemed viable so there needs to be something in the tax system that discriminates in their favour. The current tax relief schemes such as Corporate Tax Relief and BES are not proving effective as the scale is too small. Tax breaks will need significant government expenditure and possible clearance from the European Commission.
Need to approach the area of financing from the bottom up. Currently there is too much bureaucracy involved. e.g. for seed capital need to have a tax clearance certificate. There should also be a scheme in place for small savers such as a tax free saving plan. The use of green bonds is also a possibility could be matched with climate change commitments.
The government could organize a tranche of money from the European Investment Bank to Irish banks and then direct them to dedicate it to clean tech projects. Another possibility could be to create a technology bank for start-ups.
Appendix 1: Agenda
09.45 – 10.00 Coffee / Registration
Professor Frank Convery, Chairman of 10.00 Welcome and Introduction Comhar SDC 10.15 Towards a Green New Deal for Republic of Ireland Eoin McLoughlin, Comhar SDC
John Woods, Friends of the Earth 10.30 Green New Deal for Northern Ireland Northern Ireland
Paul Killeen, UCD Earth Systems 10.45 Making Innovation Happen Institute
Michael Lehane, Environmental 11.00 Research and Innovation for the Green Economy Protection Agency 11.15 Discussion
11.30 Tea/Coffee Break
11.45 – 12.45 World Café Session
Session One – Priority Areas Rapporteur – Noel Casserly
Session Two – Making it Happen Rapporteur – Cathy Maguire
Session Three – Financing Options Rapporteur – Eoin McLoughlin 13.00 - 13.30 Rapporteur Session – Reports Back/Discussion
Appendix 2: Workshop Participants:
Aidan Kinch DoEHLG
Bartley O‟Connor PriceWaterhouseCoopers Hugh Campbell PriceWaterhouseCoopers Ronan MacNioclais PriceWaterhouseCoopers Eoin McLoughlin Comhar SDC
Cathy Maguire Comhar SDC
Noel Casserly Comhar SDC
Prof. Frank Convery Comhar SDC
Paschal Stephens Comhar SDC
Fergal Naughton Glendimplex
Frank Groome EirGrid
Fred McDarby Enterprise Ireland Jessica Benson Enterprise Ireland Graham Clarke ECO Unesco
Jim Kitchen UK SDC N.I.
Jonathan Healy Forfas
Joseph Curtin IIEA
Mark Bennett Dublin City Council Micheal Lehane EPA
Lisa Sheils EPA
Pat Finnegan Grian
Paul Killeen UCD
Raymond Sexton Tangible.ie
Robert O‟Shea IBEC
Therese Murphy SEI
Tom Fitzgerald Department of Finance Tony Owens CleanTech Network Frank Corcoran An Taisce
Duncan Stewart Earth Horizon Productions Emer Dunne Irish Creamery Milk Suppliers Association
Davie Philip Cultivate
Walter Bruton ERM
Total Attendees: 32