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The Distributional Implications of a Carbon Tax in Ireland

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Author Info

  • Tim Callan

    (Economic and Social Research Institute (ESRI))

  • Sean Lyons

    (Economic and Social Research Institute (ESRI))

  • Sue Scott

    (Economic and Social Research Institute (ESRI))

  • Richard S. J. Tol

    (Economic and Social Research Institute (ESRI))

  • Stefano Verde

    (Trinity College Dublin)

Abstract

We study the effects of carbon tax and revenue recycling across the income distribution in the Republic of Ireland. In absolute terms, a carbon tax of ?20/tCO2 would cost the poorest households less than ?3/week and the richest households more than ?4/week. A carbon tax is regressive, therefore. However, if the tax revenue is used to increase social benefits and tax credits, households across the income distribution can be made better off without exhausting the total carbon tax revenue.

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File URL: http://www.esri.ie/UserFiles/publications/20080716090749/WP250.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP250.

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Length: 24 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:esr:wpaper:wp250

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Keywords: Carbon tax; Ireland; income distribution;

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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Distributional implications of a carbon tax
    by Richard Tol in The Irish Economy on 2009-09-21 14:15:10
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Cited by:
  1. Scott, Susan & Lyons, Sean & Keane, Claire & McCarthy, Donal & Tol, Richard S. J., 2008. "Fuel Poverty in Ireland: Extent, Affected Groups and Policy Issues," Papers WP262, Economic and Social Research Institute (ESRI).
  2. Leahy, Eimear & Lyons, Seán & Tol, Richard S. J., 2010. "The Distributional Effects of Value Added Tax in Ireland," Papers WP366, Economic and Social Research Institute (ESRI).
  3. Chen, Shiyi, 2013. "What is the potential impact of a taxation system reform on carbon abatement and industrial growth in China?," Economic Systems, Elsevier, vol. 37(3), pages 369-386.
  4. Duffy, David & FitzGerald, John & Timoney, Kevin & Byrne, David, 2013. "Quarterly Economic Commentary, Winter 2013," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20134, March.
  5. Curtis, John & di Cosmo, Valeria & Deane, Paul, 2013. "Climate policy, Interconnection and Carbon Leakage: the Effect of Unilateral UK Policy on Electricity and GHG Emissions in Ireland," Papers WP458, Economic and Social Research Institute (ESRI).
  6. McNamara, David & Caulfield, Brian, 2013. "Examining the impact of carbon price changes under a personalised carbon trading scheme for transport," Transport Policy, Elsevier, vol. 30(C), pages 238-253.
  7. Fawcett, Tina, 2010. "Personal carbon trading: A policy ahead of its time?," Energy Policy, Elsevier, vol. 38(11), pages 6868-6876, November.
  8. Fang, Guochang & Tian, Lixin & Fu, Min & Sun, Mei, 2013. "The impacts of carbon tax on energy intensity and economic growth – A dynamic evolution analysis on the case of China," Applied Energy, Elsevier, vol. 110(C), pages 17-28.
  9. Cludius, Johanna & Beznoska, Martin & Steiner, Viktor, 2012. "Distributional effects of the European Emissions Trading System and the role of revenue recycling: Empirical evidence from combined industry- and household-level data," Discussion Papers 2012/6, Free University Berlin, School of Business & Economics.
  10. Wasiu Adekunle Are, 2012. "Poverty-Reducing Directions of Indirect Marginal Tax Reforms in Ireland," Working Papers 201230, School Of Economics, University College Dublin.
  11. Anping Chen & Nicolaas Groenewold, 2013. "Regional Effects in China of an Emissions-Reduction Policy: Tax v. Subsidy," ERSA conference papers ersa13p1275, European Regional Science Association.
  12. Eimear Leahy & Sean Lyons & Edgar L.W. Morgenroth & Richard S.J. Tol, . "The Spatial Incidence of a Carbon Tax in Ireland," Working Papers FNU-174, Research unit Sustainability and Global Change, Hamburg University.
  13. Legge, Thomas & Scott, Susan, 2009. "Policy Options to Reduce Ireland's Greenhouse Gas Emissions," Research Series, Economic and Social Research Institute (ESRI), number RS9.
  14. Legge, Thomas & Scott, Susan, 2009. "Policy Options to Reduce Ireland's GHG Emissions [Instrument choice: the pros and cons of alternative policy instruments]," Papers WP284, Economic and Social Research Institute (ESRI).
  15. Verde, Stefano & Tol, Richard S. J., 2009. "The Distributional Impact of a Carbon Tax in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(3), pages 317–338.
  16. Martin Beznoska & Johanna Cludius & Viktor Steiner, 2012. "The Incidence of the European Union Emissions Trading System and the Role of Revenue Recycling: Empirical Evidence from Combined Industry- and Household-Level Data," Discussion Papers of DIW Berlin 1227, DIW Berlin, German Institute for Economic Research.
  17. Giménez, Eduardo L. & Rodríguez, Miguel, 2010. "Reevaluating the first and the second dividends of environmental tax reforms," Energy Policy, Elsevier, vol. 38(11), pages 6654-6661, November.
  18. David Madden, 2009. "Distributional Characteristics for Ireland: A Note," Working Papers 200910, School Of Economics, University College Dublin.
  19. Grösche, Peter & Schröder, Carsten, 2011. "On the redistributive effects of Germany's feed-in tariff," Economics Working Papers 2011,07, Christian-Albrechts-University of Kiel, Department of Economics.
  20. Labandeira, Xavier & Labeaga, José M. & Rodríguez, Miguel, 2009. "An integrated economic and distributional analysis of energy policies," Energy Policy, Elsevier, vol. 37(12), pages 5776-5786, December.
  21. Pope, Jeff & Owen, Anthony D., 2009. "Emission trading schemes: potential revenue effects, compliance costs and overall tax policy issues," Energy Policy, Elsevier, vol. 37(11), pages 4595-4603, November.

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