IN almost every conversation nowadays, reference is made to rising costs, especially energy. All over the world prices are rising and consumers are complaining.
This could have shocking consequences for agriculture, business and households. However, solutions are on our doorstep and opportunities present themselves which could indeed result in us dreaming of a taxation policy similar to Saudi Arabia, where there is no personal income tax on an individual’s earnings if they are derived from employment only.
In this article I will examine why this has happened and what the draconian outcome of it could be.
So, what has caused this surge in energy prices?
Firstly, the summer heatwave led to increased consumption of energy at a time we normally see a dip and the resumption of business after Covid-19 has pushed demand even higher.
Then there’s competition from Asian markets. Put that together and there is the perfect recipe for soaring prices. Many people do not give fertiliser a second thought, but the surging price of natural gas could make fertiliser unaffordable next year.
Natural gas is a key component in the manufacture of fertiliser. Some of the suppliers of fertiliser are even forecasting shortages of it next year which could have a devastating result for our food production.
Already the steep rise in gas prices has led to the closure of fertiliser plants in England.
One of the by products of fertiliser production is carbon dioxide. This is used widely in food production. For instance, it is used in slaughterhouses to stun livestock before they are killed, and it is used in the carbonation of drink in the drinks industry. There are fears that supplies of meat, poultry and fizzy drinks could all be hit due to the shortage of CO2. Some commentators have said that the UK could be two weeks away from British meat disappearing from supermarket shelves.
However, other European countries are not as severely impacted by the sharp increase in energy prices. Many of them have harnessed hydroelectric generation, such as Norway where 88% of its electricity supply comes from hydroelectric energy.
Why can we not do the same in Ireland?
Not only should we be self sufficient in our energy requirements, we should be an exporter of them. While there is a target of 70% of our electricity supply coming from renewable sources by 2030, we should seek to go well beyond this in the future.
The natural resources are on our doorstep. We are surrounded by water and experts say offshore windfarms are more reliable because they are better able to capture energy at low wind speeds.
Ireland also possesses one of the richest wave energy potentials of the world. The wave energy capability available to Ireland could meet 75% of its electricity requirements.
There is also massive potential in anaerobic digestion. This process facilitates the processing of organic waste from agriculture, the food industry and grass silage and convents it into energy and fertiliser.
These have become very common in some parts of the world and provide an additional source of income for farmers.
Multiple opportunities exist. However, the bureaucracy and red tape surrounding such developments need to be significantly reduced. I recently heard a comment on the radio that if free secondary school education was being introduced in Ireland today it would be strangled at birth with red tape. It behoves us all to lobby our legislators to reduce this unnecessary level of bureaucracy. As they say, common sense is not very common!
• Michael Collins is an accountant with FDC Bantry.