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The distributional implications of a carbon tax in Ireland

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  • Callan, Tim
  • Lyons, Sean
  • Scott, Susan
  • Tol, Richard S.J.
  • Verde, Stefano

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 [euro]20/tCO2 would cost the poorest households less than [euro]3/week and the richest households more than [euro]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.

Suggested Citation

  • Callan, Tim & Lyons, Sean & Scott, Susan & Tol, Richard S.J. & Verde, Stefano, 2009. "The distributional implications of a carbon tax in Ireland," Energy Policy, Elsevier, vol. 37(2), pages 407-412, February.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:2:p:407-412
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    Keywords

    Carbon tax Ireland Income distribution;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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