Why Fuel Price Rises Mask Deeper Issue
According to a new report from AA Ireland, the price of petrol and diesel rose by 32% in 2021, making Ireland one of the most expensive countries in the world to fuel an internal combustion engine vehicle.
While the increase in fuel cost has received wide and consistent reporting over recent years – with the average price per litre for petrol rising from €1.31 in 2010, to €1.70 in 2022 – little attention has been paid to the broader consequences beyond the financial and taxation impacts.
Today, we look at how the rise in fuel prices hides the true cost of our addition to oil, and why this context is essential if we are to survive the Climate Crisis.
The True Cost
In 2019, the Irish Government subsidised fossil fuels to the tune of €2.4bn.
That is more than the Irish Government spent on Children and Youth Affairs, Rural and Community Development, and the Department of Communications, Climate Action & Environment as a whole in 2019. (The names of some departments have since changed).
Let that sink in for a second – the Irish Government spent more on subsiding fossil fuels than these three crucial parts of society.
In fact, they spent four times as much making fossil fuels artificially cheaper than they did on the Department of Communications, Climate Action & Environment.
That is a stark reality of how deprioritised the Climate Crisis is by the Irish Government.
And that fact only becomes more alarming when you consider that the International Monetary Fund has warned that Ireland will need to invest €20bn per year 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. Starting by cutting fossil fuel subsidies entirely is essential.
Ireland must account for its historic emissions, as well as those it creates today. In fact, the average Irish person has a carbon footprint three times higher than the average person on Earth, and 55% higher than the average person in the EU. Credit: The Carbon Map
Addressing this issue in an interview with the Irish Times in 2021, Environmental Pillar said: “We need to eliminate these subsidies as a matter of urgency. Doing so could bear sizeable climate benefits, as their removal could reduce economy-wide carbon dioxide emissions by 20% by 2030 compared to a business-as-usual scenario”.
The Irish Government has made it clear that it is willing to fund the same fossil fuels which have made air pollution so bad that 1,300 Irish people die prematurely each year as a direct result.
While no data is available for the cost of air pollution to the HSE, or the Irish taxpayer, the World Economic Forum has reported that air pollution has a $2.9 trillion economic cost worldwide, accounting for 3.3% of the world’s GDP.
This is analogous to the Irish government subsidising the cost of cigarettes in order to keep people smoking, so harmful is the toxicity of greenhouse gases emitted by burning fossil fuels to both human and planetary health.
It is time the Irish press did a better job on reporting on the value of something, not just the cost – and there is no better place to start than fuel duty.
Fossil fuel consumption has continued to grow, despite the clear and obvious truth that we need to cut consumption to zero if we are to overcome the worst outcomes of the Climate Crisis. Credit: Our World In Data
Artificially Cheaper
This phrase is so incredibly important to keep in mind when reading stories about the rising costs of fossil fuels.
The price that Irish car drivers pay at the pump is artificially cheaper than the real cost of the fuel they are buying.
This is a major deception in the face of the Climate Crisis, as the carbon bubble will burst sooner or later, causing the price of fossil fuels to skyrocket further.
It is essential that drivers of internal combustion engine vehicles understand this, and are told the true cost of fuel, so that they can see the clear economic, climate and public health benefits of switching to an electric vehicle.
While this may already be clear to those who have made the switch to EVs – with a typical EV costing around €7 to charge from empty to full at home, compared to around €64 for the average tank of petrol – keeping the price of petrol and diesel artificially low is misleading drivers about the long-term affordability of running their vehicle – and hiding the climate implications from them entirely.
Think of it like an introductory offer in a supermarket. Sure, you might buy the product at the reduced price of €1, but when it goes up to its normal price after the special offer, you don’t go back for more.
Furthermore, with paltry subsidies for new EV purchases, a complete lack of support for used EV imports, and a lack of legislation to suppress the rampant greenwashing about ICEs and hybrids, the Irish government is locking its citizens into a potential cycle of energy poverty.
We already have plenty of people in this nation who are struggling to make ends meet. But with every year that the price of fuel rises, that EV subsidies – especially for second hand EVs – stagnate, that the necessary carbon tax rises, these people will grow poorer still.
If you already have to choose between heating your home and fuel to get you to work, and cannot afford to sell your relatively valueless diesel car and upgrade to an EV, what choice do you have? Your finances will only get stretched thinner if the Government does not wake up and address this issue.
Fuel Labelling
To help people understand the true cost of fossil fuels – both monetary and the human/planetary health implications – we should look to implement a new labelling system.
As with modern food labelling, buyers could understand the difference between the cost of their fuel to their wallet, and the wider cost to society, and make better informed choices going forwards.
We have mocked up an example of how this could look.
An example of how fuel could be labelled to help people understand the wider consequences of its use - and where it has the greatest harm. All values are examples and are not grounded in data.
Only by putting this into context – understanding the implications of rising fuel prices on finance, the climate and public health – will we be able to break the stranglehold that fossil fuels have on society and stand a chance of overcoming the worst outcomes of the Climate Crisis.
This really drives home the importance of more contextual and accountable reporting of the Climate Crisis in Irish Media, discussing the long-term implications rather than the typical knee-jerk reaction to your car costing more to fill up than a year ago.
We are dedicated to addressing this.
What To Read Next
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Is The Carbon Bubble About To Burst?
The carbon bubble will surely burst, its only a matter of when, after decades of artificial inflation of the value of oil and the denial of its impact on public health and the Climate Crisis. But what are the consequences?