The Distributional Implications of a Carbon Tax in Ireland.

by Tim Callana, Seán Lyonsa, Susan Scotta, Richard S.J. Tol and Stefano Verdee

- This paper studies the effects of carbon tax and revenue recycling across the income distribution in the Republic of Ireland. In absolute terms, a carbon tax of Euro 20/tCO2 would cost the poorest households less than Euro 3/week and the richest households more than Euro 4/week. A carbon tax is regressive, therefore. However, if the tax revenue is used to increase social benefits and tax credits, households across the income distribution can be made better off without exhausting the total carbon tax revenue.

Callana, T., S. Lyonsa, S. Scotta, R.S.J. Tol and S. Verdee (2008). "The Distributional Implications of a Carbon Tax in Ireland." ESRI WP 250, Jun 2008.