Oireachtas Joint and Select Committees
Tuesday, 18 June 2019
Committee on Budgetary Oversight
Budgetary and Fiscal Implications of Climate Change: Discussion
The carbon tax has been a hot topic of debate at meetings of this committee for some time. Most of us are in agreement that a carbon tax is necessary. We have concerns, however, about pushing people into fuel poverty. The poorest households will be hit the most. Dr. de Bruin said in her opening statement that a carbon tax on its own is quite regressive and hits the poorest the hardest. Interestingly, she spoke about recycling the tax revenue. It is not necessarily a matter of giving it back in a lump sum, whereby a carbon tax would be paid and a cheque would be handed back at the end of the year. It would be a matter of using the carbon tax to offset against income tax or other taxes, thereby reducing emissions and stimulating economic growth, which sounds good.
Professor FitzGerald is obviously a strong advocate of the carbon tax. He has highlighted that former Nobel prizewinners have advocated it as the first and essential step to reducing emissions. What is his council's view on tax recycling? Rather than taking money with one hand and handing it straight back, what is the best way to apply a carbon tax?