Climate

Scientific Context

• 2023 was the hottest year on record. [1]
• August 2024 was the 13th month in a 14-month period for which the global-average surface air temperature exceeded 1.5°C above pre-industrial levels. [2]
• The world appears to be on track to cross the 30-year average threshold of 1.5°C within ten years, the target set in the 2015 Paris Agreement.
• A 2024 Nature study found that achieving net zero greenhouse gas emissions is critical to limit climate tipping risks. [3]

Legislative and Regulatory Context

International

The 2015 Paris Agreement, adopted in 2015 under the United Nations Framework Convention on Climate Change (UNFCCC), is a critical global effort aimed at combating climate change. Its primary goal is to limit global warming to well below 2°C above pre-industrial levels, with efforts to pursue a limit of 1.5°C to significantly reduce climate-related risks. The Paris Agreement is legally binding but leaves the specifics of implementation up to individual countries, which set their own climate targets, known as Nationally Determined Contributions (NDCs), to reduce greenhouse gas emissions. They update these NDCs every five years, aiming for greater ambition over time.

Climate neutrality by 2050 means achieving net zero greenhouse gas emissions for EU countries as a whole, mainly by cutting emissions, investing in green technologies and protecting the natural environment.

The European Climate Law will soon be accompanied by the Industrial Decarbonisation Accelerator Act and Circular Economy Act, which have been promised by Ursula von der Leyen, the recently re-elected President of the European Commission. [5]

European

The European Climate Law, enacted in July 2021, sets out a net zero by 2050 target for the bloc. This law sets the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels, and in early 2024 the European Commission recommended a further interim target of reducing the EU’s net greenhouse gas emissions by 90% by 2040 relative to 1990. [4] The EU institutions and the Member States are bound to take the necessary measures at EU and national level to meet the target and to consider the importance of promoting fairness and solidarity among Member States when doing so.

National

Ireland’s Climate Action and Low Carbon Development (Amendment) Act 2021 sets legally binding targets for achieving a climate-neutral economy by 2050 and includes a commitment to reduce greenhouse gas emissions by 51% by 2030. The Act establishes rolling five-year carbon budgets which decrease over time, setting Ireland on a trajectory of halving emissions by 2030 and reaching Net Zero by 2050, in line with international ambitions.

However, the Environmental Protection Agency (EPA) warns that the State is set to reduce its total greenhouse gas (GHG) emissions by just 29% in 2030, compared with its target of 51%.

For businesses, this means a significant shift toward sustainability is required, as the Act mandates businesses to remain within sectoral emissions ceilings, requiring industries such as energy, transport, agriculture, and manufacturing to reduce emissions. The scale of emissions reductions needed for 2024 and 2025 is such that, without some radical changes, it is unlikely that the limits of the first carbon budget for 2021-2025 will be met.

The Act introduces mechanisms for government and regulators to hold businesses accountable through regular reporting and compliance monitoring. Failure to act could result in regulatory penalties, while businesses that align with the Act can benefit from green investment opportunities and long-term competitiveness.