ESRI and Green Party Living in Environmental Cloud Cuckoo Land: Time to accept the real causes of Greenhouse Effect

The Economic and Social Research Institute suggests that Ireland's greenhouse gas emissions will have increased by nearly 5% in 2007.
Professor Richard Tol of the ESRI says heavy carbon taxes must be introduced in the medium term.

Is Richard Tol living in cloud cuckoo land? Ireland has seen a massive rise in electricity, gas, diesel and petrol prices. That is tantamount to the introduction of a carbon tax.
Industry and agriculture are struggling under the strain of government-imposed regulation and crippling energy prices. The economy cannot withstand such economic lunacy. The Green Party as well as the ESRI wish to deliver the coupe de grace.

Minister for Communications, Energy and Natural Resources Eamon Ryan seems to assume that Ireland can save the planet. It is time for the Green Party to face facts. It is pointless living in an environmental dream world.
India and China have no intention of reducing their carbon emissions. Indeed they intend to increase them. Meanwhile some Western countries crippled by carbon taxes will be expected to compete with them. It is not on Mr Ryan. You are living in Fantasy Land.
It is indisputable that global warming is taking place. However the causes of global warming can be disputed.

Climate change is caused mainly by variations in the tilt of the earths axis and in its orbit around the sun. This is cyclical. Variations in the sun’s energy output is another cause. There are cycles in sunspot activity.
Sunspots have all but disappeared in recent years. When this happened 400 years ago it signalled the start of the Little Ice Age.

It is likely that we may face such an eventuality-sooner rather than later. The human contribution to green house gases contributes 0.25% to the Greenhouse Effect.
Since the end of the last Ice Age the earth’s temperatures have risen by 16 degrees Fahrenheit.
Time for some realism from the Geen Party and the ESRI.

More Carbon Tax nonsense from Ireland's ESRI

The The Economic and Social Research Institute (ESRI) claims that an EU-wide tax on CO₂ emissions would ensure that Irish industries, like farming, would not be at a disadvantage compared to other European countries.
I would suggest that the learned gentlemen of the ESRI should get out of their academic ivory tower.They are insulated from reality. Pronouncements from this body are treated as gospel. To question its findings is a form of sacrilege. Well the time has come to bin some of its suggestions.

With sky rocketing oil prices on the world market, huge petrol and diesel price rises have fed through to industry and the consumer. This is a carbon tax in action. Farming,fishing,transport and industrial sectors of the Irish economy are in dire straits. Unemployment has risen sharply.The ESB has announced a 17.5% price rise in electricity for August 1st. with another hike due in January 08. Huge gas price rises are in the pipeline. These will cripple consumers and the productive sector.

The ESRI claim-that an EU wide carbon tax would not leave Irish industry and agriculture at a disadvantage to the other EU countries-indicates the limited nature of the Institute’s thinking. Irish industry and agriculture compete on a world wide basis and not just on an EU basis. Meanwhile countries such as India,China,Russia plough ahead with a massive expansion in the generation of electricity using fossil fuels. Their Governments have no intention of cutting back on the use of fossil fuels.

We already have carbon taxes in operation in Ireland at present. Enough is enough. Any weakening in the value of the Euro would further exacerbate the situation. It is time for the learned gentlemen of the ESRI to come up with something practical for a change. Theoretical models will not put bread and butter on the table.

Latest ESRI report paints gloomy picture on the economy:Ireland is now in recession

According to The Economic and Social Research Institute (ESRI) in its latest Quarterly Economic Commentary the economy will experience a recession this year for the first time since 1983, and a return to net emigration in 2009. Ireland of the Celtic Tiger is no more.

It expects that the economy will contract in size by 0.4% this year. The ESRI calculates that the volume of domestic spending this year will fall by 2.6 %. Investment spending is expected to fall by 14.9%. Real consumer spending growth in 2008 is expected to reach just 1%.
The ESRI predicts an economic growth of 1.9% for 2009.
It expects that net emigration will reach 20,000 in 2009.

The unemployment rate is forecast to rise from 4.5% in 2007 to 6% this year and 7.1% in 2009. The Government had a budget surplus of €5.2 billion in 2006. It will have a budget deficit of €7.4 billion in 2009 according to the ESRI. This represents a deterioration of more than €12.5 billion in the space of three years.
The ESRI predicts an inflation rate of 4.5 % for 2008.

Quite frankly many of the problems were foreseeable three years ago. In the run in to the 2007 General Election the FF/PD Government ramped up public expenditure. It rose by 13% alone in 2007. It undoubtedly helped FF win the General Election. However the flood of taxes into the Government coffers-which supported this splurge- stemmed mainly from an unsustainable property boom. Now the bubble has burst with house construction down from 90,000 three years ago to 40,000-45,000 this year.

The economy was growing strongly in 2005, 2006 and 2007. It did not need a huge injection of public expenditure, which just fuelled inflation. Richard Bruton FG spokesman on Finance railed strongly against this approach as did some economists such Dr. Alan Ahearne , David McWilliams and George Lee. Dr Alan Ahearne warned about the dangers of a crash in house prices. More recently Jim Power has been critical.
Unfortunately many economists were swept along on the tide of boom and bloom.
Critics were painted as prophets of doom who were talking down the economy.

A more prudent approach to Government spending from 2005-2007 would have allowed the Government some leeway. Now the cupboard is bare. There are precedents for the inadvisability of the budgetary strategy adopted by FF/PDs in 2006 and 2007.
The boom bust approach was adopted by FF in 1977-81. Its 1977 Manifesto was a winner with the electorate promising no rates and no car tax. FF inherited an economy, which had come out of recession and was growing solidly. The Lynch and Haughey Governments pump primed public expenditure –much of it funded by borrowing. By 1981-82 the economy was in serious trouble. The hardship of the 80s had its genesis in this irresponsible Manifesto.

In the run in to the 2002 General Election the FF/PD Government let public expenditure rip. Once more Charlie McCreevy slammed on the brakes in the wake of the 2002 General Election.
The FF/PD/Green Government is now facing a double whammy. Internally tax revenue is way below expectations, the housing sector is in free fall, inflation is close to 5%, and unemployment has risen by 48,000 in the last twelve months. Externally rising fuel prices and higher interest rates have impinged strongly on the Irish economy.

The ESRI expects the general government balance to show a deficit of 2.8 % of gross domestic product this year after a 0.3 percent surplus in 2007 and worsen to a 3.9 % deficit in 2009.
"On the face of it, a breach of the 3 % ... (EU Stability and Growth Pact) guideline in a single year does not signal the death knell of fiscal prudence and given our very low debt levels could well be afforded," it said in the survey.

This advice from the ESRI should be binned immediately. The country cannot buy its way out of the mess. Unfortunately hard decisions on public expenditure are necessary. The advice from the ESRI would return Ireland to the failed policies of the late 70s and 80s.
It is likely that the real tax burden will rise. This will be supplemented by increases in stealth taxes such as local authority charges, and by large public expenditure cuts. All in all not a pretty picture.

Irish Housing Market decline continues

Irish house prices fell by 9.2% on the year in April, compared with a 8.9% decline in March, according to the independent think tank Economic & Social Research Institute (ESRI), and Permanent TSB bank. The average price paid for a new house in April 2008 was EUR 280,981, while that paid for a second hand house was EUR 278,987. The equivalent levels in December 2007 were EUR 290,296 and EUR 284,608. The full story appears here

• The 2% rise in Euro interest rates has has taken the fizz out of the market.
• The failure to radically reform Stamp Duty is a further drag on the market.
• According to figures provided to Fine Gael by the Department of Social and Family Affairs, people under 35 now make up more than half (52.9%) of the total number of people who were added to the Live Register in the past year. The figures also show that there are now 97,071 people under the age of 35 who are on the live register, the highest figure recorded since records were fully computerised in 2003 and that the number of people in the 20 to 34 age group who are unemployed has increased by 45% in the past twelve months.



• Almost 220,000 houses and apartments are lying vacant across Ireland
  New housing starts are expected to drop to 45,000 as confidence has ebbed away. Indeed this figure may be optimistic.


• House price inflation skyrocketed in recent years. Houses have been priced out of the reach of large segments of the middle class. The salaries of teachers, guards and nurses are insufficient to purchase houses.

The correction in the market has not completed its course. There is evidence that many potential house purchasers are holding off confident in the expectation that a further sizeable reduction is in store. Indeed with EU inflation rising to 3.6% -up from 3.3% it appears unlikely that the ECB will reduce interest rates in 2008.
2008 is developing into the annus horribilis for the Irish property market.

Irish Times /TNS mrbi poll shows FF support has returned to General Election levels as FF benefits from Cowen honeymoon

The adjusted figures for party support, compared to the last Irish Times poll in January, are:

• Fianna Fáil, 42 per cent (up eight points);
• Fine Gael, 26 per cent (down five points);
• Labour, 15 per cent (up three points);
• Sinn Féin, 6 per cent (down two points);
• Green Party, 4 per cent (down two points);
• PDs, 1 per cent (down two points
• Independents/others, 6 per cent (no change).

Undecided voters stood at 15% .

The results of this poll are distorted by the avalanche of positive publicity received by Brian Cowen since his election as FF leader. In fact there was saturation coverage. It was inevitable that FF would rise sharply from the 34% in the last poll. FF support is now at the same level as that obtained at the 2007 General Election. One expected that a photograph might appear showing Brian Cowen piloting an aeroplane. The adulation reached levels that are unsustainable in the long term.
FG support is at 26% just 1% below that obtained in the 2007 General Election. This is within the margin of error. In contrast to Cowen, Enda Kenny has been subjected to an ugly campaign of vilification by some elements in the media. Nevertheless he must become much more forceful on economic matters.

Both FF and FG are broadly speaking on the same level of support as obtained by both parties in the 2007 General Election.

Since this poll was taken last Monday, much gloomy economic news has seeped out in relation to building and construction, gas and electricity prices. In addition further serious problems have appeared in the health sector.

The ESRI report has a positive spin. Nevertheless when analysed there is little certitude in relation to the Irish economy. The report was a case of live horse until you get grass. Independent newspapers and the Irish Times emphasized the positive elements in the report as did RTE.
Soft publicity will not insulate the Government when public expenditure cuts bite sharply. An electorate spoilt by the unsustainable rise in government expenditure-13% in 2007- will inevitably feel withdrawal symptoms.

Labour is up 4% on its General Election returns -probably at the expense of the Greens and Sinn Fein.

It is time to wind up the PDs.