Saving the planet doesn’t have to be expensive, as EU regulations on low carbon fuel use by ships will have a “moderate” but not “dramatic” effect on the Irish economy, University of Galway economist and economic adviser to the Taoiseach, Professor Alan Ahearne has forecast.
esearch due to be published by Prof Ahearne and Daniel Cassidy has found marine fuel prices will continue to rise due to the drive toward more sustainable energy sources.
However, the impact of ships switching from fossil fuels to more expensive renewable and low carbon alternatives will not have any major effect until 2050. The research, funded by the Marine Institute, calculates that by then it will reduce gross value added (GVA) economic productivity by almost 8pc.
The costs of consumer goods are also expected to rise by just over 1pc by 2040 and by nearly 2pc by 2050 as a result of the marine fuel regulations, Prof Ahearne said.
As an island, Ireland is one of the most heavily dependent economies globally on maritime transport, Prof Ahearne explained at the Navigating to 2050 conference hosted by Irish Lights in Dublin Castle last week.
A total of 90pc of Irish imports and exports transit on ships through Irish ports, and any change in marine fuel prices is bound to have a knock-on effect.
As part of the European Green Deal, a new FuelEU Maritime regulation seeks to steer the EU maritime sector towards decarbonisation.
This is in line with the EU’s ‘Fit for 55’ target which aims to reduce net greenhouse gas emissions by at least 55pc by 2030. The regulation sets a fuel standard for ships, and includes a requirement for the most polluting ship types to use onshore electricity when at berth. It also places the responsibility for compliance on shipping companies.
“If you are going to add extra costs to shipping, it may also affect the overall Irish economy, and so we tried to quantify the impact of Fit for 55 to see if it is going to add extra costs to trade,” Prof Ahearne said.
“The GVA impact of switching to renewables is calculated at -1.56pc by 2030, but this grows to -8pc by 2050.
“Our exports are going to grow quite robustly anyway in the next 25 years, so there will be moderate effects on the overall economy.
“When we were worried about a hard Brexit, with very high tariffs, research produced much bigger numbers which could have had a very significant impact on our economy.
“By comparison, these figures are quite moderate. You also have to calculate the impact of not doing anything in terms of more sustainable fuel use, and the resulting cost of destruction of the planet,” he said.
The paper by Prof Ahearne and Mr Cassidy is one of a series documenting research carried out over the past four years.
Prof Ahearne said he did not want to comment on the cost-of-living crisis, or the impact of recent tech job losses on the Irish economy as this related to “policy areas” which are part of his Government remit.
Dutch shipping expert Carien Droppers told the conference Ireland should take into account navigational hazards posed by offshore wind farms in marine planning.
Her work involves drawing up safety regimes for offshore wind development in the North Sea, one of the busiest maritime zones in the world with over 50 wind farms.