The Impact of a Carbon Tax on Economic Growth and Carbon Dioxide Emissions in Ireland

Thomas Conefrey, John Fitzgerald (), Laura Malaguzzi Valeri and Richard Tol

No WP251, Papers from Economic and Social Research Institute (ESRI)

Abstract: 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.

Keywords: carbon tax; Ireland; double dividend; tax incidence (search for similar items in EconPapers)
JEL-codes: H23 Q54 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2008-08
New Economics Papers: this item is included in nep-acc, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.esri.ie/pubs/WP251.pdf First version, 2008 (application/pdf)

Related works:
Journal Article: The impact of a carbon tax on economic growth and carbon dioxide emissions in Ireland (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:esr:wpaper:wp251

Access Statistics for this paper

More papers in Papers from Economic and Social Research Institute (ESRI) Contact information at EDIRC.
Bibliographic data for series maintained by Sarah Burns ().