The benefits of action on implementing carbon taxation in Ireland

June 28, 2022
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Carbon taxation has emerged as an important tool in combatting climate change. To this end, the Irish Government has committed to increasing carbon tax year-on-year until it reaches €100 per tonne in 2030. Due to the fact that less wealthy households spend a greater proportion of their income on energy than more affluent households, carbon taxation imposes a disproportionate burden on these households. While this fact has been identified in the literature as a barrier to policy implementation, the distribution of the benefits of carbon taxation have not received any attention in this context.

Carbon taxation reduces demand for energy-intensive goods and brings about long-term benefits by reducing the impact of climate change and its associated costs. This research considers these benefits of carbon taxation and examines the net beneficiaries of carbon taxation and the households that lose out.