16 Moyderwell, Tralee, Co Kerry Ireland Tel: 01- 4433812 e-mail: info@ledireland.ie
Submission on the Climate Change Response Bill 2010 Frontline LEDLTD welcomes the initiative of government to enact in legislation targets for reduction of CO2as part of Ireland’s efforts to respond to climate change. The manner in which this problem is addressed is of huge importance for the Irish economy over the next twenty years it can put us in a position to take economic advantage of moves toward a greener, more sustainable model of economics. As a company with headquarters in Ireland, an Irish staff and an overseasmanufacturing division, Frontline LEDare actively considering opportunities to move production of our next-generation energy saving lighting on-shore to Ireland for export across the European Union. Energy Saving Lighting According to Dr Brian Motherway’s SEAI report ‘Ireland’s Low-Carbon Opportunity’ (SEAI, 2009), the implementation of energy-efficient lighting is an initiative capable of the largest amount of CO2 reduction with the greatest negative social cost. The implementation of a changeover on lighting to lower consumption units represents a large opportunity for the country to meet its near term targets in a cost effective manner and in a way which doesn’t raise compliance costs excessively. Motherway estimates that up to 40%of the potential reduction in CO2emissions can be done on a cost-negative basis. Motherway found that “ in both the $60/bbl and $120/bbl oil-price scenarios, improvements to energy efficiency are found to offer the cheapest and most readily available abatement opportunities.” From the perspective of Frontline LEDthis potential, coupled with the setting of multi-annual targets for CO2reduction represent significant boosts to the innovative sectors of the economy and also a boost to trades requiring assistance in the wake of the economic downturn. The recent improvement technologically in deriving reliable, industrial quality lighting from LED semi-conducters has widened the array of options available to industry, commerce and public sector bodies seeking efficiencies. Lighting in this field cuts 50%-80%from existing usage and when coupled with intelligent networks of sensors and switches are capable of up to 94%reductions. As a company with a strong presence in lighting for commercial, public and industrial sectors we think that moves to sensible, cost-effective policies on energy efficiency represent strong nearterm gains in the fight to hit our 2020 target as laid down in the Climate Change Bill 2010. Moves to Embedded Carbon A secondary consideration on the stimulus side is the emerging term of ‘embedded carbon’ referring to the quantification of carbon, or the assigning of a CO2value, to inputs in a process. For example the assignment of a value to concrete poured on a new building based on the input factors in that concrete or the assigning of values to the lighting fixtures based not only on consumption but the processof manufacture and distance in transport. Under moves afoot to begin accounting for embedded carbon within overall CO2values for buildings, products, services and other sectors, the setting of national CO2reduction targets assists
16 Moyderwell, Tralee, Co Kerry Ireland Tel: 01- 4433812 e-mail: info@ledireland.ie economically productive assets. If a low-carbon economy is the national surrounding, exporting and productive companies are already at a significant advantage to companies who have no CO2 monitoring infrastructure in place. As an incentive to calculation, monitoring and reduction, targets are the most effective means of getting ahead of this latest trend in CO2reduction. From a perspective of Frontline LED,moves to embedded carbon counting in Europe coupled with a nascent low-carbon environment in Ireland and less transport provide a compelling picture for setting up of manufacture for EU wide distribution of LEDlighting. Manufacture of Green Technology in Ireland The current nature of the green market in Ireland that many elements of industry are taking advantage of innovations to reduce their energy but current headwinds exist in the form of troubled Cap Ex budgets and tightened control over businessand private expenditure. These controls are part and parcel of any downturn however it represents an opportunity to reorient and recalibrate thinking on investment when money becomesavailable again. While there are many successful indigenous companies supplying a variety of energy saving technologies, moves toward embedded carbon calculation for products means that companies in our export sector have the opportunity, presented by the requirement to calculate their CO2 emissions, to move ahead of international competitors. They will reduce their emissions, support indigenous companies supplying green energy, improve competitivenessby reducing their electricity overheads and construct their product in such a way as to offset embedded carbon concerns overseas. The setting of binding CO2targets allows for a level playing field, everyone knows what has to be achieved. Enforcement of the targets is a vital measure to ensure growth in developing markets for supply of energy efficient technology. The Need for Binding Targets One of the major difficulties we face in the choice between options 2 and 3 as outlined in the Regulation Impact Assessment is the balance between an incentive to companies to invest in reduction of CO2and the punishment of those who over pollute. In the current economic climate, a regime of regulation which imposed heavy fines or tax burdens on CO2emitting industry would dramatically reduce the pool of private sector funding available to invest in CO2reduction. It is likely that for many Irish businesses,especially in our export sector, a double financial hit would be imposed where the carbon tax would add to company overheads while the concomitant need to reduce CO2emissions would demand extra company investment. From an economic perspective, a regime that only imposesthe latter burden is better for growth and likely to lead to the desired policy outcomes over time – a reduction in CO2emissions – with the added advantage of extending economic growth by allowing companies to finance investment in CO2reduction.
16 Moyderwell, Tralee, Co Kerry Ireland Tel: 01- 4433812 e-mail: info@ledireland.ie The addition of targets for CO2reduction to the national legislative framework is thus welcome at this juncture. Such moves will inevitably open the market for green energy, clean technology and innovation in the processof manufacture, supply, transport and business, acting as a de-factor stimulus to the green sector and to the economy generally. The imposition of a price for carbon, as per option 3, is not something to be disregarded in totality. With sufficient time to allow companies, institutions and citizens to adapt to binding CO2targets and modify their investment, behaviour and awareness,the addition of a price for CO2to the national governments armour of weapons to fight climate change would be welcome. Such moves at an early stage would hinder the pace of adoption of green technology by robbing funding from already stretched budgets. This would slow market development, hinder the kinds of investments that companies like Frontline LEDare planning to make in Ireland as a place to grow green businessesand offset the growth benefits of CO2reduction. Enforcement of the CO2targets, creates the market volume that makes an investment in Ireland for manufacture of energy efficient lighting sensible. It provides a secure base for our EU expansion and also provides a green economic space within which to operate. CO2targets will force transport innovations that will help export companies in the long term. Frontline view binding targets, enforcement and the market it will create as a key driver of green jobs and would be top of our list of requirements when deciding whether the market is sufficient to merit manufacture in the EU. In the longer term, as everyone is saving through lower energy consumption and CO2reductions, the natural step would be to enforce a price for CO2.We welcome steps to mark this out at the early stage in the processand hope to see a cross-party consensuson the proposed bill. National Experts Body Frontline LEDrecognisesthat at the early stage of implemention of legislation, significant assistance is needed to formulate government policy in the area of emissions reduction, formulate programmes to incentivise reductions and scope to enforce binding targets. The National Action Plan and the National Experts Body laid out in Sections 5 and Sections 7 are clear moves in this direction, however Frontline LEDwould like to see stronger guidelines against the dilution of efforts to reduce CO2and the exposure of the Experts Body to group think and a narrow selection of talent and ideas on energy reduction. We recommend that policy and legislation on enforcement are made provision for in the law via an amendment where the Minister is empowered and charged as an immediate follow up to the bill to draw up the enforcement mechanisms to take place. The EPAought to be in a position to oversee this in an arena that does not see it challenged by a multitude of multi-tasked quangos open to internal lobbying and the desires of special interests as well as bureaucratic turf-wars. The need for a clear channel of enforcement, backed by the minister, their plans and law where required, is vital for proposals in this bill to work.
16 Moyderwell, Tralee, Co Kerry Ireland Tel: 01- 4433812 e-mail: info@ledireland.ie We would hope that the minister usesthe experts body to challenge consensusand form radical proposals, as well as follow the evidence as it emerges of successful policy. The successof this bill rests on individuals not sitting back and allowing the minister to dictate the pace and direction of policy. The best route to cuts is open thinking and strong enforcement. Conclusion Broadly, this bill represents an effort at stimulus for the green economy and a responsible approach to limiting our CO2emissions in the face of climate change. Our efforts need to be underwritten by government strength and public support for this policy. The best way to achieve this is to ensure that successis not a distant prospect, that implementation carries positives for Irish businessand the Irish economy. The Bill as it stands could be strengthened but current political considerations likely inhibit this, however we need to ensure that this is made provision for in the enabling legislation and the minister obliged to act on enforcement and strategy in the first instance of the bill being passed. Overall we welcome this as an opportunity to grow our businessand expand a manufacturing presence in this country. We think it will make Ireland a key place once again to do businessin Europe providing CO2infrastructure to match our low-corporation tax. The importance of this infrastructure for businesslocation over the coming decade cannot be underestimated and the setting of national targets with a long term goal of carbon pricing help put Ireland in a position to grow strong in this area.