Irish Government Climate Policy makes the poor poorer, and the rich more rich. That is not an argument – it is a simple statement of fact. Yesterday’s announcement of the Government’s new retrofitting scheme was the latest cap on what is becoming, every day, a more enormous swindle of the poorest people in Irish society.
Consider first that all of the grants allocated under this scheme will be paid for by revenue raised in carbon taxes, and other climate levies. Those taxes are regressive – meaning that they hit the poor harder than the rich, because things like energy and fuel consume a bigger proportion of a poorer person’s budget.
But climate-driven taxes are regressive in other ways, also: The older your car is, the higher the road tax becomes, basically. If you are not rich enough to always buy the newest, most efficient-engine vehicles, then you pay more tax.
All of this money – taken disproportionately from the poor – is going directly into grants for the rich. The Government will give you up to €25,000 to retrofit your home for energy efficiency, but only if you have another €24,000 or so lying around to chip in yourself. It is reasonable to say that households which have that kind of money available to spend on retrofitting are not, by any common definition of the word, living in poverty.
The net effect of this, over time, will be to increase fuel poverty for the poorest, and reduce fuel costs for the richest. After all, Government intends to keep progressively increasing the costs of fossil fuel, in order to make it ultimately unaffordable. By the time that has been accomplished, it will have given the richest a hand up, and the poorest a kick in the knees. The whole thing, objectively, is one of the most morally offensive proposals any Irish Government has enacted in recent years.
And it is not only morally wrong: It is also economically illiterate, as demonstrated by the Tánaiste, Mr. Varadkar, yesterday afternoon:
Varadkar says he accepts there will be a challenge to get the staff to do this.
He says people who work in construction can learn to to this in a matter of weeks.
— Richard Chambers (@newschambers) February 8, 2022
Construction staff working on retrofitting are construction staff who cannot – at least, not at the same time – work on new housing builds. Government is, at the same time as it is pouring money into retrofitting, also pouring almost €3billion this year into capital housing expenditure – most of it on new homes. What they’re doing is filling two huge pots with money, and getting those pots, effectively, to bid against each other for the same workers. The result will be a bonanza for construction workers, and elevated prices. The Government will end up bidding up the costs of all these things, with the taxpayer’s own money.
At a time, of course, when inflation is already a problem.
Across the board, this is a policy which will drive up costs, and inflation, and poverty, while doing next to nothing – even in the medium term – to substantially reduce emissions.
For example, it is reasonable to wonder how many people will actually bother to take the Government up on this plan: In general, people with the funds lying around to afford a massive retrofit can also afford the higher fuel costs. Retrofitting a home properly for a heat pump, and insulation, is a massive amount of work, which in almost all cases will mean vacating your home for several months. There are a great many people who will be able to afford to undertake this work under a retrofitting scheme, but don’t see the benefit to themselves of all the inconvenience that the work will cause them.
We might very well end up with very limited uptake, and modest (if any) impact on emissions.
A scheme like this is, of course, not a policy that this Government would be enacting, were it not wholly reliant on the support of the Green Party for its survival. This idea was Green from the moment of its conception, and unsurprisingly, it is also a policy almost explicitly designed to benefit Green Party supporters. The Greens draw their votes disproportionately from middle class parts of Ireland’s cities; their voters tend to be wealthier than the average, and less dependent on cars for transport. This policy amounts to a wealth transfer to those people, and away from traditional Fianna Fáil and Fine Gael voters outside of the major cities.
There will be many more losers, ultimately, from this idea, than there are winners. You will lose every time you visit a filling station, or have to pay for electricity, or tax your car, or buy home heating oil. You will win if you happen to have tens of thousands in savings, and nothing better to do with them. This will not work out well for the Government, in the long term, either economically, or politically. They deserve every bit of the backlash that will come their way.