In 2020 emissions fell just 5.9pc according to the Environmental Protection Agency (EPA). That was despite a significant economic contraction, large scale unemployment and a dramatic reduction in transport activity.
The scale of our carbon emissions challenge has been laid bare, particularly with respect to our heat leaking housing.
While transport emissions decreased significantly (17pc), our residential emissions grew by 9pc. Together, these two sectors account for around two-thirds of our emissions. A closer look at the growth in residential emissions reveals an even more stark message.
Covid-19 only kicked off in March – meaning January and February, the colder months, were the same as other years.
Everyone remembers the first lockdown and the good weather. September, October and November were either warmer or average in temperature range compared to prior years, and we were not in full lockdowns that entire period.
December did have a bite to temperatures, but again, we were not in full lockdown and at least two weeks of December is holiday season every other year – so again baseline.
The actual scale of inefficiency in our housing stock may be far worse than the EPA numbers suggest.
We are certainly the worst offenders in the EU, with SEAI data showing Irish homes emit almost 60pc more CO2 than the EU average. Thus in our pursuit of climate action, we may need a new point of discussion on the implications of “working from home”.
As more people work from home, companies’ realistic climate ambitions have to take the domestic emissions of our people into account whether they work from home or the office. At EY our goal is to achieve a science-based target for a 40pc reduction in our absolute emissions (2019 baseline) by 2025, it’s clear that means residential emissions reduce too.
The challenge is great. Our current housing stock is estimated by GeoDirectory at just over two million units – half urban and half rural.
SEAI data shows Irish homes emit almost 60pc more CO2 than the EU average
The Government’s Long-Term Renovation Strategy sets the ambition for retrofitting up to a quarter of the country’s private residences (500,000) to a Building Energy Rating (BER) of B2 by 2030, with the expectation of achieving 1.5 million residences by 2050.
Separately of course we have a housing stock shortfall, with a requirement for some 350,000 new energy efficient homes over the next ten years. This creates a significant tension in the supply/demand equation for housing. If retrofitting is overly expensive or overly inconvenient – a new energy efficient home may be more attractive.
This creates a potentially new tension on the demand for new builds rather than existing homes, which impacts affordability and leaves the efficiency burden potentially unaddressed. Any answer must seek to balance the perceived cost-benefit equation and make retrofitting (particularly deep retrofitting) a more attractive proposition for existing homeowners.
Structures and tools that appropriately incentivise behavioural changes for homeowners to undertake retrofitting programmes, and in general to reduce energy consumption, must be deployed. An appropriately designed, communicated and executed carbon tax system, with an associated suite of policy and planning frameworks in support, will help ensure appropriate behavioural nudges, while being sensitive to potential unintended consequence for society (such as increasing unaffordability, or penalising first time buyers perhaps). Whatever the solution, it must in tandem seek to address the lack of appropriate supply of housing in the market.
Retrofitting 50,000 homes a year and building an additional 30,000 to 35,000 in new stock is a monumental task. CSO data estimates that just €3bn or 11.1pc of total construction investment was on improving the building stock in 2019. So is the scale of the Government’s ambition to address the residential housing emissions and supply gap enough? What are our barriers to doing more and faster? And can our challenge be turned into an opportunity?
Delivering our retrofitting ambition will require access to finance, traineeships and education programmes. The EU Green Deal, Renovation Wave programme, offers an opportunity to launch a new ambition for Ireland in this regard.
Renovation Wave will provide a significant funding injection with the goal of crowding in private investment. From advancements in innovations in deep retrofitting, heat pumps, micro-generation, hydrogen homes, new building materials, insulation techniques, and many other potential areas, Ireland’s current extensive retrofitting requirement and variety of housing stock of different grades, could prove to be a valuable test bed for innovators, entrepreneurs and investors in this space. This in turn creates opportunities for firms and drives local economic growth, while also addressing our retrofit deficit head on. A recent report from the International Energy Agency found that building renovation projects create 12-18 local jobs for every million invested, thus supporting economic recovery. The opportunity for a win-win-win in this space is significant.
Ireland needs to urgently embark on a deep building renovation programme to tackle residential emissions. Aside from the direct benefits of more energy efficient homes, which improve health and well-being, there will be lower energy bills for consumers which can address energy poverty. In addition, a comprehensive energy retrofitting programme creates jobs directly in construction and in the supply chain, particularly in small and medium sized firms.
Tackling this issue and putting Ireland at the nexus of the EU Green Deal and the Renovation Wave will not only put a huge dent in our climate ambition targets, but it could be a significant driver of our economy for the coming decade.
Who knows, unlocking our full potential in this area could even see us witness the birth of a new, Green Tiger.
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Stephen Prendiville, Head of Sustainability, EY Ireland and Annette Hughes, Economist, EY-DKM Economic Advisory.
EY and Ibec are supporting the #DublinClimateSummit with EU Commissioner for Climate Action Frans Timmermans February 23 discussing opportunities for Ireland in unlocking the full potential of the EU Green Deal and Renovation Wave.
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