Oireachtas Joint and Select Committees

Wednesday, 5 September 2018

Joint Oireachtas Committee on Climate Action

Third Report of the Citizens' Assembly: Discussion

10:00 am

Dr. Kelly de Bruin:

I will start with the first question on the carbon tax analysis. I do not think here is the place to go into the specific details of a model but the way it works is that we track all the carbon commodities through the economy, so we see how the carbon commodities go into the production processes and create goods. These goods are consumed by households. Households can choose to consume different goods with different carbon contents. We agree with the Senator and, in our model, all the prices are directly sent to the household. The prices of certain goods become higher because of their carbon content. Households can then choose to switch from one good to another because it becomes cheaper because other goods have become more expensive due to this carbon tax. In that way, even though the producer is paying these taxes but putting them on to the consumer, they are hurt in that fewer of their goods will be consumed. That is the framework in which we look at this.

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