Cost vs Value

We are fast approaching the Irish Government’s Budget announcement, where they will declare their funding for 2022 and beyond for everything from social care, to carbon taxing.

While the announcement is still more than a fortnight away at the time of publication, there has already been heated debate about whether subsidies for electric cars should be maintained or cut – despite clear evidence that cuts have reduced uptake in other countries.

Today we look at the importance of understanding the difference between cost and value, and why this is a critical distinction in the face of the Climate Crisis.

EV Incentives

“Electric car grants, tax breaks to be reviewed as cost to State of continuing supports could rise to over €1.2bn for just 100,000 EVs”.

That was a recent headline in the Irish Independent, which detailed the findings of a report by the EV Policy Pathway Working Group.  Needless to say from the tone of the headline that the article was overtly negative about the importance of EVs, and made only a minor mention of the importance of battery electric vehicles in cutting Ireland’s horrifically high greenhouse gas emissions.

Cost vs Value

It has been clear for some time that delaying action on the Climate Crisis will only increase the cost of tackling it further down the line – a sentiment compounded in the IPCC’s latest report.

The International Monetary Fund has stated that Ireland will need to invest €20 billion annually for the next decade in climate-related infrastructure and mitigation measures to achieve the emissions reduction targets set out in the Climate Action Bill.

While that might sound like an enormous amount of money, it accounts for just 5% of the nation’s GDP, and that cost will only go up without action.

Then there’s the associated costs of dealing with insurance payouts for homes affected by Climate Crisis-related flooding, coastal erosion, the thousands who already die from poor air quality each year, housing the billions of people who will be displaced by the Climate Emergency.

To put this into a broader context, the impact of the Climate Crisis is likely to cost the global economy upwards of €6.75 trillion ($7.9 trillion) by 2050.

Let us be clear, there is already a heavy cost associated with the Climate Crisis. But there is inherent value in tackling it, and that value can also lead to economic returns.

Sure battery electric vehicles are not an answer to the Climate Crisis in themselves. They will not tackle congestion, nor lower the amount of land taken up in urban areas for parking – in this way they cannot hold a candle to investment in public transport and active travel.

Yet, there is great value in EVs. They will reduce the 6 million tonnes of CO2 produced by Irish cars every year, improve air quality, and offer more affordable mobility for people who use cars – with running costs around 74% lower per year compared to an internal combustion engine vehicle.

They also offer the potential to break free from fossil fuels in the transport sector, running our entire nation’s vehicles on renewable energy – with transport accounting for 20% of Ireland’s emissions, this would take us a long way to our greenhouse gas emissions targets.

Furthermore, it is essential that we start to see EVs as an agent of tackling the Climate Crisis, and not just as a cost – but as a shift in perspective where we place a greater emphasis on the social value of tackling issues.

Time is running out, but we have the means and money to tackle the Climate Crisis, if we are willing to change our emphasis to value over cost.

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