Averting A Clean Energy Poverty Tax

In the past week the Centre for Research into Energy Demand Solutions published its research into the best ways to change consumption to cut carbon footprints, highlighting that switching to a battery electric vehicle was the second most impactful after living car-free.

While IrishEVs fully supports the aim of living car-free, we know that it is a difficult genie to put back in the bottle – especially when car-free alternatives require significant investment in urban planning, public transport, and a cultural shift away from consumerism. In Ireland, with such a rural population, having personal transport is also seen as something of a necessity – hence our championing of EVs.

However, in today’s blog, we want to highlight the urgent need for government support to ensure that there is not an increase in energy poverty and to avoid electric cars and renewable energy being the reserve of those who can afford to adapt – while those who cannot afford it are left behind and taxed as a consequence.

How might the clean energy revolution increase energy poverty?

While the clean energy revolution is fundamental to overcoming the climate crisis, it also requires that those converting have the funds available to invest up front – as the initial outlay is expensive but provides quick returns and is soon into net profit.

This applies to both renewable energy and electric vehicles.

2020 is an incredibly important year for electric cars, as it is the first time that we have seen that their retail price is on a par (or, in some cases, lower) with their petrol and diesel counterparts. Yet, despite running costs being 74% lower, this still requires that consumers have either upwards of €25k available to them, or a good credit rating to secure finance, in order to make the switch.

While we will see costs continue to fall in the coming years, it is clear that the rich and the middle classes will be able to adopt zero-emissions personal transport and renewable energy before those with lower or more vulnerable incomes.

As such, there is significant potential those who do not have disposable income, savings or high credit ratings to take advantage of the tax breaks that the Irish government offer for EVs or renewable energy.

This is a common trend worldwide and was the subject of a 2019 research project conducted by Portland State University.

Ultimately, without government support, the inequality gap will continue to grow and will be further exacerbated by the upcoming ban on internal combustion engine vehicles in 2030 – as necessary as that ban is in order to fight the emissions and climate crisis.

Taxing those who cannot afford to adopt clean energy and zero-emissions transport is not the way forward.

What can be done to avert this?

In addition to robust government funding to increase nationwide adoption of electric vehicles and renewable energy, we must ensure that the Irish government sets aside specific funding for lower income households to support them in adapting.

The burden of change should not be placed on their shoulders, and we must recognise that it is a requirement of the State to take action on the climate crisis for the benefit of all citizens and the environment.

We have already seen legal action in the Netherlands where their national government was deemed to be failing on this front.

As such, we must ensure that there is a sliding scale of funding available to all Irish citizens to help them reduce their carbon footprint, incentivising change rather than taxing inaction. This is a conversation that needs to be held at a nationwide level, with multiple stakeholders representing the many charities who help the people in greatest need of support in Ireland every day.

This conversation has not yet started, but is more urgent than ever.

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