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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 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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  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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