Irish Fiscal Watchdog Warns Climate Inaction Could Cost State €13 Billion by 2050

The State’s fiscal watchdog has issued a warning that a failure to address climate change could incur costs of up to €13 billion for the State by 2050. The Irish Fiscal Advisory Council (IFAC) highlighted that a credible mitigation plan, estimated at €4 billion, could significantly reduce the overall financial impact of climate change.

IFAC emphasized that delaying action on climate change presents a substantial risk to public finances. The Council urged the Government to prioritize domestic investment to mitigate living costs and safeguard the economy. Specific recommendations included investments in home retrofits, public transport infrastructure, renewable energy sources, and enhancements to the national electricity grid.

The organization also noted a projected decline in tax revenues from fossil fuels as the adoption of electric vehicles increases. To counteract this, IFAC advised the Government to develop a strategy for replacing lost revenue, suggesting measures such as congestion charges and distance-based road charges. The Council clarified that this revenue replacement should not lead to an increased overall tax burden but rather a restructuring of how travel-related taxes are imposed.

Seamus Coffey, Chairperson of the Council, stated, «We can wait for global action and leave our economy exposed to big budget risks and volatile energy prices. Or we can take control by investing in our own homes, transport, and energy networks. Spending the money here in Ireland would help ensure lower living costs and better health outcomes for citizens, making it the sensible approach.»