Government climate polices are dramatically increasing inflationary pressures   

The Oireachtas Parliamentary Budget Office (PBO) has confirmed that there has been more inflation and price volatility in the past 11 months (between January 2021 and November 2021), than there has been in the previous 12 years combined.  

The PBO’s Inflation Issues for Ireland 2022, published today, also notes that fuel and electricity make up approximately half of current inflationary pressures with unleaded petrol prices having increased by approximately 37% and diesel prices having increased by 39% compared to last year.

Ireland’s electricity prices are among the most expensive in the EU according to the PBO, citing the fact that in the first half of 2021, Ireland had an average consumer electricity cost of €0.21 per Kilowatt-hour, as opposed to a €0.14 average for the Euro area.

In an alarming assessment of future inflationary trends, the PBO say that the policy changes which are necessary to meet the Government’s climate change targets “would likely increase inflationary pressures significantly in the long-term, especially for fuel.”

The Parliamentary Budget Office has acknowledged that that there are significant concerns that climate change policy may be far more expensive in future than projections that are currently budgeted for.

Ireland’s failure to reduce greenhouse gas emissions will result in “hefty fines” at EU level, estimated to be €600 million annually from 2021, until targets are reached.

Failure to reach 2030 targets may result in fines in excess of €1 billion, according to an earlier PBO analysis.

Gript has previously highlighted the fact that the Governments controversial Climate Action and Low Carbon Development (Amendment) Bill 2021, has been estimated by the International Monetary Fund (IMF) to cost €20 billion each year until 2030.

Responding to this assessment the Independent TD for Laois-Offaly Carol Nolan described the €180 billion cost attached to the implementation of the Bill’s objectives as ‘obscene.’

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