The Impact of a Carbon Tax on Economic Growth and Carbon Dioxide Emissions in Ireland
This paper analyses the medium-term effects of a carbon tax on growth and CO2 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. These results hold even if we allow changes in energy prices to have an enhanced (detrimental) effect on Ireland's competitiveness.
|Date of creation:||Aug 2008|
|Contact details of provider:|| Postal: Whitaker Square, Sir John Rogerson's Quay, Dublin 2|
Phone: (353-1) 863 2000
Fax: (353-1) 863 2100
Web page: http://www.esri.ie
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard S. J. Tol & Tim Callan & Thomas Conefrey & John FitzGerald & Seán Lyons & Laura Malaguzzi Valeri & Susan Scott, 2008. "A Carbon Tax for Ireland," Papers WP246, Economic and Social Research Institute (ESRI).
- Tol, Richard S. J., 2005. "The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties," Energy Policy, Elsevier, vol. 33(16), pages 2064-2074, November.
- Wiepke Wissema & Rob Dellink, "undated".
"CGE Analysis of the Impact of a Carbon Energy Tax on the Irish Economy,"
- Wissema, Wiepke & Dellink, Rob, 2007. "AGE analysis of the impact of a carbon energy tax on the Irish economy," Ecological Economics, Elsevier, vol. 61(4), pages 671-683, March.
- Jorgenson, Dale W. & Wilcoxen, Peter J., 1993. "Reducing US carbon emissions: an econometric general equilibrium assessment," Resource and Energy Economics, Elsevier, vol. 15(1), pages 7-25, March.
- FitzGerald, John & Bergin, Adele & Conefrey, Thomas & Diffney, Sean & Duffy, David & Kearney, Ide & Lyons, Sean & Malaguzzi Valeri, Laura & Mayor, Karen & Richard S. J. Tol, 2008. "Medium-Term Review 2008-2015, No. 11," Forecasting Report, Economic and Social Research Institute (ESRI), number MTR11, April.
- Fischer, Carolyn, 2008.
"Emissions pricing, spillovers, and public investment in environmentally friendly technologies,"
Elsevier, vol. 30(2), pages 487-502, March.
- Fischer, Carolyn, 2004. "Emissions Pricing, Spillovers, and Public Investment in Environmentally Friendly Technologies," Discussion Papers dp-04-02, Resources For the Future.
- Bye, Brita, 2002. "Taxation, Unemployment, and Growth: Dynamic Welfare Effects of "Green" Policies," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 1-19, January.
- Baumol, William J, 1972. "On Taxation and the Control of Externalities," American Economic Review, American Economic Association, vol. 62(3), pages 307-322, June.
- Li, Hui & Berrens, Robert P. & Bohara, Alok K. & Jenkins-Smith, Hank C. & Silva, Carol L. & Weimer, David L., 2004. "Would developing country commitments affect US households' support for a modified Kyoto Protocol?," Ecological Economics, Elsevier, vol. 48(3), pages 329-343, March.
- Strand, Jon, 1998.
" Pollution Taxation and Revenue Recycling under Monopoly Unions,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 100(4), pages 765-780, December.
- Strand, J., 1996. "Pollution Taxation and Revenue Recycling Under Monopoly Unions," Memorandum 16/1996, Oslo University, Department of Economics.
- Don Fullerton & Gilbert E. Metcalf, 1997.
"Environmental Controls, Scarcity Rents, and Pre-Existing Distortions,"
Discussion Papers Series, Department of Economics, Tufts University
9703, Department of Economics, Tufts University.
- Fullerton, Don & Metcalf, Gilbert E., 2001. "Environmental controls, scarcity rents, and pre-existing distortions," Journal of Public Economics, Elsevier, vol. 80(2), pages 249-267, May.
- Don Fullerton & Gilbert Metcalf, 1997. "Environmental Controls, Scarcity Rents, and Pre-Existing Distortions," NBER Working Papers 6091, National Bureau of Economic Research, Inc.
- van der Werf, Edwin, 2008.
"Production functions for climate policy modeling: An empirical analysis,"
Elsevier, vol. 30(6), pages 2964-2979, November.
- Edwin van der Werf, 2007. "Production Functions for Climate Policy Modeling: An Empirical Analysis," Working Papers 2007.47, Fondazione Eni Enrico Mattei.
- Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-283, June.
- Conniffe, Denis & FitzGerald, John & Scott, Susan & Shortall, Fergal, 1997. "The Costs to Ireland of Greenhouse Gas Abatement," Research Series, Economic and Social Research Institute (ESRI), number PRS32.
- Giavazzi, Francesco & Jappelli, Tullio & Pagano, Marco, 2000.
"Searching for non-linear effects of fiscal policy: Evidence from industrial and developing countries,"
European Economic Review,
Elsevier, vol. 44(7), pages 1259-1289, June.
- Francesco Giavazzi & Tullio Jappelli & Marco Pagano, 2000. "Searching for Non-Linear Effects of Fiscal Policy: Evidence from Industrial and Developing Countries," NBER Working Papers 7460, National Bureau of Economic Research, Inc.
- Giavazzi, Francesco & Jappelli, Tullio & Pagano, Marco, 2000. "Searching for Non-Linear Effects of Fiscal Policy: Evidence from Industrial and Developing Countries," CEPR Discussion Papers 2374, C.E.P.R. Discussion Papers.
- Pizer, William A., 1999. "The optimal choice of climate change policy in the presence of uncertainty," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 255-287, August.
- David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
- Koskela, Erkki & Schöb, Ronnie & Sinn, Hans-Werner, 1998.
"Pollution, Factor Taxation and Unemployment,"
Munich Reprints in Economics
19493, University of Munich, Department of Economics.
- Mordechai SHECHTER & Ruslana Rachel PALATNIK, "undated".
"Can Climate Change Mitigation Policy Benefit the Israeli Economy? A Computable General Equilibrium Analysis,"
- Ruslana Palatnik & Mordechai Shechter, 2008. "Can Climate Change Mitigation Policy Benefit the Israeli Economy? A Computable General Equilibrium Analysis," Working Papers 2008.2, Fondazione Eni Enrico Mattei.
- Bradley, John & Fitz Gerald, John & Kearney, Ide, 1993. "Modelling supply in an open economy using a restricted cost function," Economic Modelling, Elsevier, vol. 10(1), pages 11-21, January.
- FitzGerald, John & McCoy, Daniel, 1992. "The Economic Effects of Carbon Taxes," Research Series, Economic and Social Research Institute (ESRI), number PRS14.
- A. Bovenberg & Frederick Van der Ploeg, 1998. "Consequences of Environmental Tax Reform for Unemployment and Welfare," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(2), pages 137-150, September.
- Goulder Lawrence H., 1995. "Effects of Carbon Taxes in an Economy with Prior Tax Distortions: An Intertemporal General Equilibrium Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 271-297, November.
When requesting a correction, please mention this item's handle: RePEc:esr:wpaper:wp251. 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: (Sarah Burns)
If references are entirely missing, you can add them using this form.