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Carbon Dioxide, Energy Taxes and Household Income

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  • Cathal O'Donoghue

    () (University of Cambridge)

Abstract

This paper examines the impact of a carbon tax on the income distribution in Ireland using the 1987 Household Budget Survey. Previous studies have focused on the direct impact of the carbon tax on expenditures on domestic fuels. This study however, drawing on previous work expands the analysis to cover the indirect impact of carbon taxes on other household purchases> A direct and indirect tax would have a less regressive effect on the income distribution than a simple direct tax on household fuel expenditures. A consumer demand system was in addition used to determine the behavioural response to a number of reforms, including a tax only on industrial fuel purchases and a revenue neutral direct and indirect tax, where revenues were redistributed via a flat payment.

Suggested Citation

  • Cathal O'Donoghue, 1997. "Carbon Dioxide, Energy Taxes and Household Income," Papers WP090, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:wp090
    as

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    File URL: http://www.esri.ie/pubs/WP090.pdf
    File Function: First version, 1997
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    References listed on IDEAS

    as
    1. Gay, Philip W. & Proops, John L.R., 1993. "Carbon---dioxide production by the UK economy: An input-output assessment," Applied Energy, Elsevier, vol. 44(2), pages 113-130.
    2. Cline, William R, 1991. "Scientific Basis for the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 904-919, July.
    3. Keller, W.J. & Van Driel, J., 1985. "Differential consumer demand systems," European Economic Review, Elsevier, vol. 27(3), pages 375-390.
    4. Casler, Stephen D. & Rafiqui, Aisha, 1993. "Evaluating Fuel Tax Equity: Direct and Indirect Distributional Effects," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(2), pages 197-205, June.
    5. Callan, Tim & O'Donoghue, Cathal & O'Neill, CiarĂ¡n, 1994. "Analysis of Basic Income Schemes for Ireland," Research Series, Economic and Social Research Institute (ESRI), number PRS21.
    6. James M. Poterba, 1991. "Tax Policy to Combat Global Warming: On Designing a Carbon Tax," NBER Working Papers 3649, National Bureau of Economic Research, Inc.
    7. Conniffe, Denis & Scott, Susan, 1990. "Energy Elasticities: Responsiveness of Demands for Fuels to Income and Price Changes," Research Series, Economic and Social Research Institute (ESRI), number GRS149.
    8. Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-948, July.
    9. Scott, Susan & McCoy, Daniel, 1992. "Theoretical Considerations and Estimates of the Effects on Households," Book Chapters,in: FitzGerald, John (ed.), The Economic Effects of Carbon Taxes Economic and Social Research Institute (ESRI).
    10. Callan, Tim & Nolan, Brian & Whelan, Brendan J. & Hannan, Damian F. & Creighton, S., 1989. "Poverty, Income and Welfare in Ireland," Research Series, Economic and Social Research Institute (ESRI), number GRS146.
    11. Casler, Stephen D. & Rafiqui, Aisha, 1993. "Evaluating Fuel Tax Equity: Direct and Indirect Distributional Effects," National Tax Journal, National Tax Association, vol. 46(2), pages 197-205, June.
    12. Vanessa Brechling & Stephen Smith, 1994. "Household energy efficiency in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(2), pages 44-56, May.
    13. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    14. FitzGerald, John & McCoy, Daniel, 1992. "The Economic Effects of Carbon Taxes," Research Series, Economic and Social Research Institute (ESRI), number PRS14.
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    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 19:15:10

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    Cited by:

    1. Brita Bye & Snorre Kverndokk & Knut Rosendahl, 2002. "Mitigation costs, distributional effects, and ancillary benefits of carbon policies in the Nordic countries, the U.K., and Ireland," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 7(4), pages 339-366, December.
    2. Kverndokk,S. & Rosendahl,E., 2000. "CO2 mitigation costs and ancillary benefits in the Nordic countries, the UK and Ireland : a survey," Memorandum 34/2000, Oslo University, Department of Economics.

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