Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

Gabhaim buíochas leis na finnéithe as teacht os comhair an choiste. I look forward to our engagement. I thank the witnesses for taking the time to come before the committee.

My first question is for the ESRI. With regard to the model, Dr. de Bruin stated that the results show that the proposed carbon tax increase has the potential to reduce emissions by approximately 16% by 2030 when compared with the absence of an increase. One of the things that is often said about predictive models is that they are only as good as the assumptions they are based on. Dr. de Bruin stated: "According to microeconomic behaviour, producers and consumers maximise their profits and utility given their budget constraints." This means that the model assumes switching behaviour on behalf of rational consumers in line with rational choice theory. Dr. de Bruin also mentioned that this is done within budget constraints.

I have three questions. We know that consumer choices are often found to be inconsistent with the assumptions of rational choice theory. How does the model account for that? In the context of budget constraints, will Dr. de Bruin explain how the model will work in practice? From my experience, tax can be used to change behaviour provided there is the essential aspect of an affordable alternative. Many of my constituents are extremely environmentally conscious, but a lot of people are struggling financially at the moment. These people are not able to afford a Tesla or a hybrid car of any description. They cannot afford to install solar panels on their roofs, and so on. The tax just increases their cost of living but does not make an electric car any cheaper for them. I am interested in the witnesses' views on that.

The war has massively increased the cost of carbon. The reduction in the availability and supply of Russian oil, gas and coal has pushed up the cost. Presumably, if the theory on switching behaviour in response to price increases is true, we should already have witnessed a massive switch because of inflation. Do we have any evidence to demonstrate that this has happened? Perhaps Dr. de Bruin could talk us through how the model deals with these three issues. That would be great.