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Trade, Energy, and Carbon Dioxide: An Analysis for the Two Economies of Ireland

  • Hyland, Marie
  • Jennings, Anne
  • Tol, Richard S. J.

In this paper we use a subsystem input-output decomposition analysis to examine the drivers of greenhouse gas emissions in the Republic of Ireland and in Northern Ireland. We use a bi-regional input-output analysis to look at how greenhouse gases in one region can be emitted as a result of demand in an exporting region. Looking at emissions generated throughout the island of Ireland, we find that emissions driven by demand in Northern Ireland are larger than those it generates, and vice-versa for the Republic of Ireland. We then use the input-output tables to simulate the effect of imposing a ?15/tonne carbon tax in the Republic of Ireland. We find that this causes a decrease in final demand in the Republic of Ireland, and a decrease in output in both the Republic of Ireland and in Northern Ireland; the decrease is greater in the Republic as the domestically produced share of inputs is much larger than the imported share in all sectors.

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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP420.

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Date of creation: Jan 2012
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Handle: RePEc:esr:wpaper:wp420
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  1. John M. Hartwick, 1970. "Notes on the Isard and Chenery-Moses Interregional Input-Output Models," Working Papers 16, Queen's University, Department of Economics.
  2. Joe O'Doherty & Richard Tol, 2007. "An Environmental Input-Output Model for Ireland," The Economic and Social Review, Economic and Social Studies, vol. 38(2), pages 157-190.
  3. Leontief, Wassily, 1970. "Environmental Repercussions and the Economic Structure: An Input-Output Approach," The Review of Economics and Statistics, MIT Press, vol. 52(3), pages 262-71, August.
  4. Xavier Labandeira & José M. Labeaga, 1999. "Combining input-output analysis and micro-simulation to assess the effects of carbon taxation on Spanish households," Fiscal Studies, Institute for Fiscal Studies, vol. 20(3), pages 305-320, September.
  5. Llop, Maria & Tol, Richard S. J., 2011. "Decomposition of Sectoral Greenhouse Gas Emissions: A Subsystem Input-Output Model for the Republic of Ireland," Papers WP398, Economic and Social Research Institute (ESRI).
  6. Lyons, Sean & Mayor, Karen & Tol, Richard S.J., 2009. "Convergence of consumption patterns during macroeconomic transition: A model of demand in Ireland and the OECD," Economic Modelling, Elsevier, vol. 26(3), pages 702-714, May.
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