A new report shows that least €129 billion will need to be invested in “dedicated energy transition” measures between 2024 and 2030 with an estimated €4.3 billion needed specifically for the agriculture sector.
According to the report published today (Thursday, October 26) by the stockbroking and wealth management company, Davy, Ireland will need to invest €25,000 per person from next year to 2030.
This adds up to a total €18.5 billion each year on dedicated energy transition measures as part of the country’s decarbonisation journey.
This together with the government’s stated commitments in the National Development Plan represents, according to Davy, the “largest ever investment by the state, households and businesses”.
Dr. Fergal McNamara, senior policy director at Davy, examined how this investment will be funded and by whom in his report “Investing in tomorrow: Shaping a net zero future“.
“Climate investment represents both a substantial opportunity and challenge and doubtless will focus attention and debate on investment across sectors relative to their respective climate emissions, agriculture typically being a case in point.
“That debate need not delay investment in areas and in sectors where the known benefits of planned investment are indisputable and are, in many cases, self-financing,” he said.
In the new report Davy estimates that the sectoral spread of the investment will be as follows:
- Electrification of energy and transport: €86 billion;
- Retrofitting of homes and commercial buildings: €36 billion;
- Agriculture: €4.3 billion;
- Industry: €3 billion.
According to Dr. McNamara more than 85% or €110 billion of the projected investment will come from private spending including consumer spending of €57 billion on electric vehicles and on home retrofitting.
Agriculture
In an analysis of the agriculture sector to 2030 Davy also highlights that across the EU, the food and the agriculture sector “accounted for 10.3% of emissions in 2021, significantly below that of Ireland at 34%”.
“This naturally poses challenges for Ireland,” Davy states in the report.
It suggests that targets set out in the government’s Climate Action Plan “require behavioural changes by farmers”.
Davy identifies the development of a “biomethane solution” using a range of feedstuffs and an increase in organic farming as two key areas where there could be investment opportunities for the agriculture sector.
According to Dr. McNamara although the estimated €129 million investment required for energy transition measures in Ireland may overall seem like ” punchy numbers” he believes that they “dwarf the environmental, economic, political and social costs of doing nothing, as evidenced by the destruction and cost of recent flooding in east Cork”.
“EU fines and reputational damage will also keep Ireland’s feet to the fire to deliver on climate change objectives or suffer even greater cost over the longer term,” he warned.