Oireachtas Joint and Select Committees

Tuesday, 18 June 2019

Committee on Budgetary Oversight

Budgetary and Fiscal Implications of Climate Change: Discussion

Professor John FitzGerald:

On the issue of regression, research dating back to 1992 shows that although carbon taxes are regressive, some but not all of the revenue can be used to compensate people on low incomes to ensure they are no worse off. A paper published by Dr. Barra Rowntree last week shows that such people would be better off if all of the revenue was used to compensate them. That is the evidence. It is up to the Oireachtas to decide how it wants to distribute the income. The net effect of introducing a substantial increase in carbon taxes and using the revenue raised in various ways could be to leave people on low incomes better off, rather than worse off. The climate would be much better off in such circumstances.