Identifier
Created
Classification
Origin
07DUBLIN735
2007-09-20 11:54:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Dublin
Cable title:  

CODEL LARSON'S VISIT TO IRELAND

Tags:  SENV ENRG EFIN EI 
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RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHDL #0735/01 2631154
ZNR UUUUU ZZH
R 201154Z SEP 07
FM AMEMBASSY DUBLIN
TO RUEHC/SECSTATE WASHDC 8609
INFO RUCNMEM/EU MEMBER STATES
UNCLAS SECTION 01 OF 02 DUBLIN 000735 

SIPDIS

SENSITIVE
SIPDIS

STATE FOR H

E.O. 12958: N/A
TAGS: SENV ENRG EFIN EI
SUBJECT: CODEL LARSON'S VISIT TO IRELAND

Summary
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UNCLAS SECTION 01 OF 02 DUBLIN 000735

SIPDIS

SENSITIVE
SIPDIS

STATE FOR H

E.O. 12958: N/A
TAGS: SENV ENRG EFIN EI
SUBJECT: CODEL LARSON'S VISIT TO IRELAND

Summary
--------------


1. On September 17, CODEL Larson and Ambassador Foley met with Irish
officials to discuss ways Ireland is addressing climate change and
the secret to the success of the Celtic Tiger. Minister of
Communications, Energy, and Natural Resources Eamon Ryan briefed the
CODEL on, among other things, Ireland's efforts to meet their Kyoto
Protocol commitments through the increased use of renewable energy.
Sean Dorgan, the CEO of the Irish Government's Investment and
Development Agency (IDA),offered his views on the reasons for
Ireland's economic success over the last two decades, including the
draw of low corporate tax rates. Representative Larson said that
his trip to Ireland followed his participation on CODEL Pelosi to
Greenland, Berlin, London and Brussels in May, to study climate
change. He stressed Speaker Pelosi's strong commitment to
addressing this issue, including her efforts in the U.S. Congress
and her plans to attend the December climate change conference in
Bali.

Minister Ryan on Renewable Energy...
--------------


2. Opening the meeting, Representative Larson noted his personal
interest in the climate change issue and pointed out that House
Speaker Pelosi was also extremely committed to tackling this issue
through her work in the U.S. Congress and globally. Minister Ryan
said that the Irish Government, too, was looking at ways to reduce
emissions, mainly through advanced technology and the promotion of
renewable energy. He said that wind and ocean energy were both
areas in which Ireland had a natural advantage and pointed out that
the country generates about five percent of its energy needs through
such renewables and aims to increase that to 30 percent by 2020.
Ryan said that, to him, the questions of energy security and climate
change are linked and that technological advances in renewable
energy could alleviate concerns on both fronts.


3. That said, Ryan admitted that the technology on wind and ocean
energy was still not advanced enough to make them commercially
viable. Given that, the government probably has a role to play in
supporting research in these areas. Various members of the CODEL
were interested in other sources of energy like nuclear and in fuel
cell technology. Ryan said that Ireland is not only staunchly

anti-nuclear but the economics of nuclear do not work in a market as
small as Ireland. On fuel cells, he said that Ireland does not
really have the research base to engage in this but rather takes its
lead from the EU.

...And Cap-and-Trade vs. A Carbon Tax
--------------


4. In response to a question from Representative Larson about the
viability of a carbon tax instead of relying on a cap-and-trade
system, Minister Ryan said that governments would need every
available tool to combat global warming. Ryan was upbeat on the
prospects for cap-and-trade schemes like the European Trading System
(ETS) to slow the growth in emissions but stressed that what was
need was a global, pan-sector deal. He agreed with Representative
Larson that the problem with the ETS was the inequitable initial
allocation of emissions credits to industry but noted that European
leaders look as though they are moving to rectify that problem.

The Politics of Climate Change
--------------


5. In Ryan's opinion, a carbon tax had some economic appeal but
setting a carbon tax that would be high enough to be a reasonable
deterrent would be difficult politically. Highlighting these
difficulties, Ryan said that a recent poll in Ireland showed that 65
percent of the public have some doubt that global warming is
occurring. Therefore, he is trying to move this issue out of the
"political cycle" and work on cross-party support for a strategy to
address the problem. Ryan said that gaining such a consensus in
Ireland was relatively easier than in the U.S because of its size.


The Making of the Celtic Tiger
--------------


6. In the IDA meeting, Representative Larson noted the large
presence of U.S. multinationals in Ireland and asked how the Irish
Government planned to keep overseas investment strong in the face of
increasing costs and more intense global competition. Sean Dorgan,
head of IDA, said that U.S. FDI played a crucial role in the boom
Ireland has experienced over the last two decades. This FDI was
attracted by the low corporate tax rate and the highly educated
Irish workforce, among other things. Most of this investment has
been in high-value added industries which are reliant on strong
intellectual property protections. Going forward, Dorgan believes
that if Ireland is to compete globally the Irish Government must

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continue to strongly support higher education -- especially at the
graduate level and in the hard sciences -- and to improve the
physical infrastructure on the island.


7. Responding to questions on the slowdown in the housing sector,
Dorgan admitted that this would likely slow growth but that the
economy would still expand this year. On the possibility of the
sub-prime loan contagion reaching Ireland, he commented that Irish
lending institutions do not, to his knowledge, engage in much
lending of this sort. However, he is worried about the effects of a
general downturn in the U.S. due to the Irish economy's strong
linkages with this market.


8. CODEL Larson cleared on this cable.

FOLEY