Advanced Search
MyIDEAS: Login to save this paper or follow this series

Ireland's Carbon Tax and the Fiscal Crisis: Issues in Fiscal Adjustment, Environmental Effectiveness, Competitiveness, Leakage and Equity Implications

Contents:

Author Info

  • Frank J. Convery
  • Louise Dunne
  • Deirdre Joyce

Abstract

Beginning in late 2008, Ireland experienced a fiscal crisis. This resulted in November 2010 in agreement between the Irish government and the European Central Bank, the European Commission and the International Monetary Fund (IMF) – known collectively as ‘the Troika’ – whereby the latter provided substantial financial support, on condition that a number of revenue raising and expenditure reduction targets were met. Also in 2010, a carbon tax at a rate of EUR 15 per tonne of CO2 was introduced, covering most CO2 emissions from the non-traded sectors (mainly transport, heat in buildings and heat and process emissions by small enterprises). This paper describes the features of the tax, recounts the story of its interplay between fiscal adjustment and helping meet the obligations to raise taxes, and implications for competitiveness and carbon leakage, environmental effectiveness and equity issues, and draws some conclusions regarding why it happened, and provides some tentative insights for other countries in a similar situation. The circumstances that resulted in a carbon tax being proposed and subsequently introduced in Ireland include: Leadership by the Green Party; limited public opposition; Government need for the income; supports the Green Economy; support from the academic and wider policy population; exemptions for large emitters (many in EU ETS) and agriculture; effective engagement and good planning... L’Irlande a connu fin 2008 une crise budgétaire qui a conduit son gouvernement à conclure, en novembre 2010, un accord avec la Banque centrale européenne, la Commission européenne et le Fonds monétaire international (FMI) – collectivement dénommés la « Troïka » – dans lequel ce dernier s’engage à lui apporter une aide financière conséquente, sous réserve qu’elle remplisse un certain nombre d’objectifs en matière de prélèvements fiscaux et de réduction des dépenses. En 2010 a été également mise en place une taxe carbone de 15 EUR par tonne de CO2, couvrant la plupart des émissions de CO2 des secteurs hors SCEQE (transport, chauffage des bâtiments et chauffage et procédés des petites entreprises, principalement). Ce rapport décrit les caractéristiques de cette taxe, relate ses interactions avec le rééquilibrage budgétaire et les obligations de prélèvements fiscaux, examine ses conséquences pour la compétitivité et le transfert d’émissions de carbone, son efficacité environnementale et les questions d’équité, et tire certaines conclusions sur les raisons qui ont poussé l’Irlande à faire ce choix, en proposant plusieurs enseignements qui pourraient se révéler utiles aux pays confrontés à une situation analogue. La taxe carbone a été proposée puis mise en oeuvre en Irlande dans un contexte bien particulier caractérisé par : le rôle moteur du Green Party ; la faible opposition du public ; un État en quête de recettes ; la promotion de l’Économie verte ; le soutien des milieux universitaires et des responsables publics en général ; l’exonération des grands émetteurs (inclus pour beaucoup dans le SCEQE) et de l’agriculture ; un réel engagement et une bonne planification...

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1787/5k3z11j3w0bw-en
Download Restriction: no

Bibliographic Info

Paper provided by OECD Publishing in its series OECD Environment Working Papers with number 59.

as in new window
Length:
Date of creation: 03 Oct 2013
Date of revision:
Handle: RePEc:oec:envaaa:59-en

Contact details of provider:
Postal: 2 rue Andre Pascal, 75775 Paris Cedex 16
Phone: 33-(0)-1-45 24 82 00
Fax: 33-(0)-1-45 24 85 00
Email:
Web page: http://www.oecd.org
More information through EDIRC

Related research

Keywords: carbon tax; policy lessons; fiscal adjustment; taxe carbone; enseignements pour l’action; ajustement budgétaire;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oec:envaaa:59-en. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.