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The impact of a carbon tax on economic growth and carbon dioxide emissions in Ireland

Listed author(s):
  • Thomas Conefrey
  • John D. Fitz Gerald
  • Laura Malaguzzi Valeri
  • Richard S.J. Tol

This paper analyses the medium-term effects of a carbon tax on growth and CO 2 emissions in Ireland, a small open economy. We find that a double dividend exists if the carbon tax revenue is recycled through reduced income taxes. If the revenue is recycled by giving a lump-sum transfer to households, a double dividend is unlikely. We also determine that a greater incidence of the carbon tax falls on capital than on labour. When combined with a decrease in income tax, there is a clear shift of the tax burden from labour to capital. Finally, most of the effect on the economy is due to changes in the competitiveness of the manufacturing and market services sectors.

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File URL: http://hdl.handle.net/10.1080/09640568.2012.709467
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Article provided by Taylor & Francis Journals in its journal Journal of Environmental Planning and Management.

Volume (Year): 56 (2013)
Issue (Month): 7 (September)
Pages: 934-952

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Handle: RePEc:taf:jenpmg:v:56:y:2013:i:7:p:934-952
DOI: 10.1080/09640568.2012.709467
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