In this weeks blog NERI economist, Paul Goldrick-Kelly discusses his recent Research InBrief on 'A comparison of emissions trends for three small open economies'.
Ireland’s climate performance to date has been patchy. To our credit, Ireland’s ranking in the Climate Change Performance Index has climbed from 46 to 37, reflecting some advances related to our legally binding climate budgets. These stipulate a fall in emissions of 51 per cent over 2018 levels by 2030. However, we remain a poor performer and implementation remains weak. MAREI analysis indicates that we’ve already expended some 139 million of our 295 million tonnes of CO2 equivalent 5 year carbon budget from 2021-2025. That’s nearly half of the budget over 40% of the time. This implies significant reductions moving forward if we’re to remain within our carbon budget.
What particular factors might explain Irish underperformance? One way of approaching these issues is by way of comparisons. Analysing emissions performance this way can offer some evidence about what issues are Ireland specific, and offer some sense of what a less emissions intensive Ireland may look like, particularly where these “peer states” share other similarities. This comparative analysis forms the basis for my recently published NERI InBrief.
In many ways, Ireland, Austria and Sweden are similar countries. The three states are all EU members which are relatively small, with comparable levels of income and high levels of international trade. Despite these parallels, these states differ significantly in their historic emissions performance.
Between 1990 and 2019 (I exclude 2020 data due to the unusual circumstances of the pandemic), Sweden led the pack in gross emissions reductions measured on a territorial basis. Emissions peaked in 1996, well before Ireland and Austria’s respective peaks in the 2000s. Despite having the lowest gross emissions per head in 1990, total emissions fell by 28.9 per cent from 71.4 million tonnes of CO2 equivalent (hereafter Greenhouse gases or GHGs) to 50.8 million tonnes.
Ireland in contrast, showed aggregate emissions of 60.2 million tonnes of GHGs in 2019, a growth of about 9.7 per cent over 1990 values though this represented a drop in emissions per head of 21.9 per cent. This was likely related, at least in part, to Ireland’s rapid population and catch up economic growth over the period relative to these comparators. Austrian aggregate emissions had returned to approximately 1990 levels by 2019 at 79.7 million tonnes of GHGs , following a peak in 2005.
Within the inventory framework, emissions can be broken down by broad emissions sources. For gross greenhouse gas emissions, these broad sources comprise Energy, Industrial Processes and Product Use, Agriculture and Waste.
In the Irish and Austrian cases, Energy Sector emissions – which incorporate emissions from fossil fuel sources - were significant drivers of emissions growth, showing increased GHGs of 4.2 and 2.2 million tonnes of GHGs respectively between 1990 and 2019. In both cases, increases in emissions related to transport activities – road transportation in particular - outweighed significant declines arising from Energy industries (such as power generation). In Austria, emissions from transport increased by 10.6 million tonnes of GHGs over the period, with a corresponding figure in Ireland of 7.1 million tonnes. In the Irish case, the Energy sector accounted for nearly 80 per cent of the overall increase in emissions, while it exceeded overall emissions change in Austria.
In contrast, emissions from fossil fuel sources represent the major source of decline in the Swedish case. This was true across its constituent subsectors including energy industries, manufacturing and transport. The broad sector accounted for 84.2 per cent of emissions reductions or 17.4 million tonnes of GHGs.
Ireland was distinctive in terms of the relative contribution of Agriculture to emissions and its growth over the period. Emissions here grew by 1.9 million tonnes, while emissions in the sector fell by 0.8 and 1.1 million tonnes in Sweden and Austria respectively. This greatest portion of this growth is explained by enteric fermentation tied to Ireland’s cattle herd. Industrial processes and Product Use emissions, on the other hand, set Austria apart. Emissions within this sector grew by 2.9 million tonnes, largely explained by Metal Industry there (primarily steel production).
What might this analysis suggest? In many ways, the Irish emissions story, which significantly shapes the current state of play for climate policy here, is idiosyncratic. The relative prominence of Agricultural emissions, for example, suggests that particular policy paths are required for the sector. On the other hand, Sweden’s consistent superior emissions performance – with aggregate emissions significantly below Irish levels even as the state is far more populous – may point to institutional or policy templates to emulate in areas like Transport. Given our climate difficulties to date, we should pay close attention to better performance elsewhere to both possibly explain current issues and offer pathways forward.