Climate action income supplement could alleviate costs of transitioning to carbon zero future

by

Shana Cohen03/03/2022

The rise in oil prices and the recent IPCC report, which stresses that we have very little time to mitigate against the worst effects of climate change, underscore the importance of reducing our dependence on fossil fuels. At the same time, critics of increasing the carbon tax during a period of high inflation pit the climate measure against current economic conditions. They cite bad timing and the tax’s punitive impact on lower income households as reasons to delay or abolish it.

Considering the scale of the challenge to reduce emissions in Ireland, the government must convince the public that climate action is the only way forward to reduce the cost of living, whether in the short- or long-term. 

The carbon tax is regressive and thus it is easy to criticize its implementation. But the backlash against it highlights the difficulty of ‘selling’ the measures needed to truly reduce carbon emissions in Ireland, already behind on many of climate-related targets. As the Climate Action Plan itself notes, “Despite the economic impact of COVID-19, greenhouse gas emissions in Ireland decreased by only 3.6% in 2020, demonstrating the scale of the decarbonisation challenge for Ireland over the coming decade.” The Sustainable Energy Agency 2021 annual report mentions that 2020 targets for increasing use of renewable energy, especially in transport and heating, fell short, sometimes substantially.

Faced with the enormity of the task of combatting climate change and the negative impact climate measures can have on households, how should the government proceed?

Climate action concerns climate change but it also influences more social concerns like quality of life, personal aspirations and career paths, and choices of where and how to live. Rather than subsume these issues within the rhetoric of a Just Transition, the government should address them directly. How can climate action offer more economic security, improve health, and widen opportunities for social mobility?

At the moment, political arguments tend to focus on responsibility for younger and future generations, or the long-term obligation of protecting the planet. An Taoiseach has argued that younger generations in Ireland “need this Oireachtas to deal with climate change once and for all. We can’t keep on postponing climate change, we can’t keep delaying climate change.”

But if the government wants to convince the critics and struggling households, then they need to go beyond specific measures, whether small-scale, like cycle lanes, or national, like retrofitting. Instead, the government must outline policy proposals that would help make the transition to a lower carbon future more palatable and affordable. I can suggest two.  

First, the government should consider providing a universal ‘climate change income supplement’ during the lifetime of the Climate Action Plan. This supplement would alleviate the personal costs of climate action while the government enacts the Plan, especially for disadvantaged groups. Much has been made about the impact of pandemic payments like the PUP on retaining jobs and protecting families against falling into poverty. Climate change certainly warrants the same type of crisis response to protect incomes.

Second, this climate change income supplement should be provided simultaneous to immediate and expanded investment in climate-related training opportunities and jobs, public transport, funding streams for community development (like the recent Pobal funding), facilitating local ownership of wind farms and other climate-related businesses, and so on. Such investment would provide tangible benefits to communities and enhance the appeal of climate action.

This two-pronged targeted approach would differ from the redistribution of income that characterises current policy to mitigate the costs of climate action. Currently, the carbon tax revenue is being used for targeted social welfare policies, the retrofitting scheme and incentives for farmers. The rest of the population is supposed to change consumer habits to fight climate change and generally manage on its own. The targeted approach - for specific populations and needs, echoes the long-term strategy of using cash transfers to reduce poverty rates, rather than mandating higher wages, encouraging profit-sharing models like cooperatives, and investing in universal public services.

Yet, gauging from ongoing reaction to the carbon tax, this strategy on its own is not likely to achieve the results as we need it to, to reduce emissions.  Michael Fitzmaurice TD encapsulated some of the anxiety and tensions concerning climate policy in a debate with Green TD Neasa Hourigan on a Claire Byrne Show a few weeks ago: “What do the people get out of It [€4 billion taken in by carbon tax]. Damn all is the reality.”  He honed in on those who do not qualify for benefits like the fuel allowance, or the medical card, who will suffer from higher costs of living without new government support. Probably, many listeners sympathised with his arguments.

The Climate Action Plan recognises the urgency and the existential imperative of reducing carbon emissions and offers a range of creative proposals for reaching net-zero in the long-run. However, only equally ambitious, innovative, and complementary policies across social protection, community development, education, transport, business, and other areas that affect people’s lives will allow the Plan to accomplish what it has to, for all of our sakes.

Posted in: Environment

Tagged with: climatechange

Dr. Shana Cohen

Shana Cohen

Dr. Shana Cohen is the Director of TASC.

She studied at Princeton University and at the University of California, Berkeley, where she received a PhD in Sociology. Her PhD analyzed the political and social consequences of market reform policies in Morocco for young, educated men and women. Since then, she has continued to conduct research on how economic policies have influenced political and social identity, particularly in relation to collective action and social activism.

She has taught at George Washington University, the University of Sheffield, and most recently, University of Cambridge, where she is still an Affiliated Lecturer and Associate Researcher.  Her areas of teaching have included global social policy, globalization, and human services.

Before coming to TASC, she was Deputy Director of the Woolf Institute in Cambridge. In her role at the Institute, she became engaged with interfaith and intercultural relations in Europe, India, and the Middle East.

Beyond academic research, Shana has extensive experience working with NGOs and community-based organizations in a number of countries, including Morocco, the US, the UK, and India. This work has involved project design, management, and evaluation as well as advocacy. She has consulted for the World Bank, the Grameen Bank Foundation, and other private foundations and trusts.


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