Sustainable Economy

The quality of Ireland's environment is generally good though it has been under increasing pressure over the last decade, as a result of economic changes, population growth and changing consumer patterns.  Ireland’s geology is very diverse, with extensive freshwater wetlands.  Inland waters comprise a much higher percentage of total area in Ireland compared to many other European countries. The extended, heavily indented coastline (over 7,000 km) and large expanse of territorial waters have contributed to its extraordinary marine diversity.The Department of Environment, Community and Local Government (DoECLG) has primary responsibility for environmental policy. The Environmental Protection Agency (EPA) is a statutory body responsible for protecting the environment, including the licensing and enforcement of activities with the potential to cause serious pollution.

Current Trends

Sustainable socio-economic development is a core element of the European Union's (EU) Sustainable Development Strategy (SDS). The strategy sets out the objective of promoting a prosperous, innovative, knowledge-rich, competitive and eco-efficient economy, which provides high living standards and full and high-quality employment throughout the EU. 

In Ireland, the recent economic recession had lowered pressure on the environment in areas such as waste generation and greenhouse gas (GHG) emissions, but as key sectors of the economy have now started to recover, the main challenge for Ireland is to try to grow the economy in a sustainable way.


In the mid-20th century Ireland’s population started to grow but emigration was still prevalent until the early 1990’s. Even today Ireland remains relatively sparsely populated compared to most other European countries.  However, the demographics of the country have changed significantly over the past two decades, largely due to the economic boom known as the Celtic Tiger. There was significant inward migration, mainly from Eastern Europe, but also from Africa, Asia and elsewhere, and many Irish emigrants returned. There has also been a high natural population increase (births exceeding deaths).

These factors have led to Ireland’s population growth being five times the EU average over the ten-year period 2000-2010. The population is still increasing and by 2011 it was 4.5 million.  In addition, the population has become increasingly urbanised over recent decades, with consequent pressures on the environment and on the provision of environmental services.

The Economy

The numbers of people at work in Ireland remained relatively static from the 1970’s to the early 1990’s at just in excess of 1 million, and currently stands at around 1.9 million in 2015. In 1973, when Ireland joined the EEC, agriculture represented 24 per cent of those at work, industry 31 per cent, and services 45 per cent. By 2008, total employment had almost doubled and agriculture represented just 5 per cent of those at work, industry 25 per cent, and services had increased very significantly to 70 per cent.  As a result of the recent recession there was a slight increase in agricultural employment and a decrease in industrial employment, particularly in the construction sector. 

The increased population of working age, primarily due to strong inward migration, coupled with higher female participation rates contributed to the high labour force growth. However, the recent economic recession significantly affected the economy and gross domestic product (GDP) per capita had fallen since 2008. There was a very sharp rise in the standardised unemployment rate from 6.4 per cent in 2008 to 14.8 per cent in 2012, but with the recent improvement in the economy it has gradually fallen again and stood at 10 per cent in April 2015. It is projected to continue on this downward trend.


Many of the persistent environmental problems that we face, such as air pollution, biodiversity loss, and hazardous waste, are rooted in unsustainable production and consumption patterns.  These common and interlinked drivers have largely been left unaddressed in policy practice that has mainly focused on partial and local mitigation of environmental pressures.  Yet the environmental effects of human overconsumption of natural resources are exemplified by global climate change.

Domestic Materials Consumption

Domestic Material Consumption (DMC) is a measurement of the total amount of material directly used in an economy, excluding hidden flows. DMC is broken down into four main components: Biomass, Metallic Minerals, Non-Metallic Minerals and Fossil Fuels.  DMC increased from 113 million tonnes in 1994 to peak at 234 million tonnes in 2006, and declined to 108 million tonnes by 2012. 

The trend in DMC statistics has been driven by the behaviour of Non-Metallic Minerals in Domestic Extraction which peaked at 164 million tonnes in 2006, before declining to 48 million tonnes by 2012. These figures are driven by two main categories, Sand and Gravel and Crushed Rock, which reflect the level of construction activity in the economy (growth up to 2006 and declined in later years).

Households and Consumption

In Ireland, between 2001 and 2010 the number of private households grew by 343,200 or 26.3 per cent. In that period the average size of private households fell from 2.95 persons to 2.71, continuing a long-term downward trend.  This trend of an increasing number of households and smaller household size has a significant impact on consumption patterns, including the demand for energy and household goods.

It is estimated that one-person households consume, on average, 38 per cent more products, generate 42 per cent more packaging waste, and use 55 per cent more electricity per person, than four-person households.

Transport Patterns

Transport is responsible for 19.1 per cent of total greenhouse gas emissions.  Between 1990 and 2007, transport emissions grew considerably in Ireland, with emissions in 2007 up to 137 per cent higher than in 1990.  However, since 2007 transport emissions have decreased by 20 per cent up to 2012, mainly due to the economic downturn, and changes to the vehicle registration and road taxes.  However, in 2013 there was a 2.1 per cent increase (0.23 Mt CO2eq) in emissions which is the first increase since 2007.


Agriculture remains the largest use of land in Ireland, with two-thirds of land devoted to it. Food Harvest 2020 projects significant changes in production, particularly in the dairy sector, with a target to increase milk production by 50 per cent with the removal of milk quotas, resulting in a 12 per cent increase in GHG emissions by 2020 on current levels.  Some areas of the country are more suitable than others for intensification and more vulnerable areas such as vulnerable groundwater and drinking water sources need careful protection.


The energy industries accounted for 19.6 per cent of total national greenhouse gas emissions in 2013.  Ireland’s energy requirement increased significantly for two decades up to 2008 due to growth in energy consumption for transport, electricity and space heating, but then fell by 18 per cent between 2008 and 2013. 

While renewable energy use has increased it still accounted for just 6.4 per cent of the primary energy requirement in 2012. Ireland has abundant renewable energy resources in wind, water, geothermal, solar and biomass and has a target of 16 per cent share of gross final energy by 2020 under the EU Renewable Energy Directive. 



What's Being Done


Switching vehicle taxation to emissions instead of engine size in 2008 was an attempt to incentivise more sustainable transport choices. The new car taxation system also highlights how environmental sustainability is interwoven with economic and financial sustainability.

In the first year of the new emissions-based taxation system, average emissions of new cars fell by 13 per cent, due to a significant switch to diesel cars, and estimated total emissions declined by 5.9 kt CO2.  This was a significant policy success and the consumer trend since then is towards emissions-efficient cars.

The readjustment of tax band rates in 2012 continues the incentive towards more emissions-efficient cars while maintaining exchequer revenues. Given the strong relationship between growth in transport emissions and the economy, it is reasonable to assume that as the economy recovers, transport emissions will increase without sustained policy action and further intervention.

Environmental Tax Revenue

Environmental taxation revenue fell sharply between 2008 and 2009, due in large part to the collapse in new car sales which significantly reduced revenue from Vehicle Registration Tax (VRT) following the change to the calculation of VRT based on the emission rating of the vehicle. 

However, revenue increased in 2010 due to the introduction of the carbon tax which yielded €235 million.  The carbon tax was introduced in 2009 as a policy instrument specifically designed to encourage and accelerate fuel switching away from carbon-intensive fuels such as petrol, diesel, and home heating oil.  It was increased to €20/tonne in 2012. 

In 2013, the carbon tax was extended to two of the most carbon polluting fuels (peat and coal), on a phased basis.  The intention of the carbon tax is to also encourage householders to avail of grants for better home insulation, and to upgrade their old oil or gas boilers to high efficiency condensing boilers.  In 2012, environmental taxes accounted for 8.7 per cent of Ireland’s total tax revenue. This was the fourth highest in the EU and is above the EU average of 5.9 per cent.


Environment and the Economy

The flagship initiative for a resource-efficient Europe under the Europe 2020 strategy supports the shift towards a resource-efficient, low-carbon economy to achieve sustainable growth.  It provides a long-term framework for actions in many policy areas, supporting policy agendas for climate change, energy, transport, industry, raw materials, agriculture, fisheries, biodiversity and regional development.

Establishing a sustainable pattern of development is a key challenge for Ireland, and improving resource efficiency is a top priority to achieve this goal. The challenge is to utilise resources in a sustainable manner throughout their lifecycle, avoiding over-exploitation and reducing the environmental and social impacts of their use.

Resource Efficiency and the Green Economy

Resource efficiency (RE) means ‘doing more with less’. In other words, producing more, earning more, and improving the quality of life, while using fewer resources (materials, water, energy), and doing less harm to the environment and ecosystem. It is vital that Ireland seeks to improve Resource Efficiency and Resource Productivity as:

• very large savings can be achieved (greater earnings per unit material used), with potential for economic benefits and job creation

• it is consistent with current Government policy and programmes to promote a ‘Green Economy’.

If we want our society to be competitive and sustainable we need to live better while using less. This is the central message of the sustainability strategy Towards a Resource Efficient Ireland.  This strategy sets out the priorities and actions for Ireland to move away from a ‘take-make-use-dispose’ economic model to an economy and society where we consume less and more efficiently, products are kept in use for longer, and wastes are recovered for use as raw materials.

Sustainable Growth

A central plank of Ireland’s economic recovery will centre on opportunities for investment and employment creation in sectors such as renewable energy, energy efficiency and waste and water management. An economic model for Ireland based on sustainable growth will provide the following advantages:

• free up resources for household spending and productive investment by reducing energy and material costs

• provide a boost to jobs in the expanding ‘environmental industries’ sector

• make progress towards the demanding carbon emission reduction targets

• protect valuable ecological assets and improving the quality of Ireland’s living environment for generations to come.

Green Public Procurement

Public authorities are major consumers, spending approximately €14 billion annually. Green Tenders: An Action Plan on Green Public Procurement (GPP) is aimed at boosting the uptake of GPP, which is an important tool in advancing the green economy and resource efficiency agenda. The Action Plan identifies eight areas of procurement as particularly suitable for GPP: construction; energy; food and catering services; transport; ICT; cleaning products and services; paper; and uniforms and other textiles. It sets an indicative target to be achieved as soon as possible, that at least half of public procurement contracts will include GPP criteria.