Ireland’s energy and climate policy has long been based on a fantasy, which has been ruthlessly exposed by the Russian invasion of Ukraine. After all, we are supposed to believe, here in Ireland, that the higher taxes we are paying on energy, and the efforts to curb the size of our national herd, and our commitment to carbon credits and building windmills are all part of a global strategy. Accepting that one country, like Ireland, cannot fix the climate by itself, we are instead part of a global war against rising temperatures.
Except, of course, that we are not. After all, only a fool, observing events in Ukraine, could seriously believe that President Putin, at the head of one of the world’s great powers and greatest polluters, is committed to the fight against climate change. He is instead committed to a fight for Russian greatness, or his version of it.
It might seem unusual to start a column on the war in Ukraine with Irish climate policy, but the two are deeply connected. Our vulnerability to the conflict, here in Ireland, is inherently linked to foolish energy policy decisions that Ireland, and the wider EU, has made. Witness, for example, all the talk in recent days about the Nordstream 2 gas pipeline, now set to be cancelled as a rebuke to Russia. The net effect of this cancellation may, or may not, be negative for the Russians, but it will certainly be negative for Europe.
This war will mean higher oil and gas prices, not only as a result of a short term shock, but because of the wider and longer term disruption and instability wrought in the global economy. All the while, Ireland’s Government retains a policy of refusing to even countenance the importation of gas from the United States through the Shannon LNG terminal, because of green objections to the fact that some of the gas is fracked.
Home heating oil, yesterday, was retailing at almost a euro a litre in Ireland. That is up almost 50% on two years ago. Petrol is about to cross 2 euros a litre. Electricity costs are soaring. All of these prices were already rising sharply, and that was before Russian tanks smashed through the Ukranian defences yesterday morning.
It is very difficult to admit, in fairness to the public, that Irish policy for much of the last decade has been based on a fantasy. Our default setting, here in Ireland, has always been not only to favour a “kumbaya” view of the world, where all the peoples of the earth act in peaceful harmony through the United Nations, but to act as if that was already the case, when it simply is not.
To survive as a country, or at minimum, to remain relatively prosperous and peaceful, we need basic things: A reliable supply of energy is at the top of that list. And yet, for two decades, our policy has been to move away from reliable energy supplies in favour of unreliable energy supplies: Subsidising renewable power, and relying more and more on the European energy grid with its reliance on Russian-supplied gas. At the same time, our policy has been to make oil and gas more and more expensive, through increased taxation, as part of an attempt to save the global climate.
That policy did not take into account the fact that Vladimir Putin, and his allies in Beijing, do not care about climate change, and are more than willing to use energy as a weapon against the west, including Ireland. We may be more collateral damage, than the target of such weaponisation, but we are vulnerable nevertheless.
In the coming days and weeks, as prices rise, Putin will get the blame. He will, in fact, be a convenient scapegoat for Irish politicians, who can pin much of the inflationary crisis on Russian aggression. But the fact that Russian aggression is able to influence our economy to the extent that it will is ultimately a result of poor strategic choices made by our own Government.
Our energy policy, in the face of this crisis, should be realigned immediately. For starters, the insane decision to block the Shannon terminal should be reversed. Ireland has the opportunity to secure a reliable supply of natural gas from across the Atlantic, largely free from Russian-imposed shocks, and should grab it with both hands.
For another thing, counter-inflationary measures should be implemented immediately. The Government has the power to forestall much of the forthcoming price shock in oil and gas by adjusting the tax rate on those products. There is no need even to make the price lower than it is today: They could and should just use moving tax reductions to keep the price at the pump where it is this morning, even if the underlying price of crude rockets.
Finally, we should be taking a long and hard look at our climate strategy. Though this will fall on deaf ears, it simply does not make sense to continue to hobble our country in pursuit of a global climate settlement that is – make no mistake about this – simply not coming. It is not going to happen, no matter how hard Eamon Ryan might try to wishcast it into existence. All we are doing here is making ourselves relatively weaker than those, like Putin and China, who are happy to see the west weaken itself while they spend the money we are allocating to climate change on tanks, and cyber warfare.
We do not live in a kumbaya world. This week should make that clear. It is time for Ireland, as a country, to grow up about that.