Oireachtas Joint and Select Committees

Tuesday, 18 June 2019

Committee on Budgetary Oversight

Budgetary and Fiscal Implications of Climate Change: Discussion

Dr. Kelly de Bruin:

I am in agreement with Professor FitzGerald. As economists, the reason we are so focused on a carbon tax is it directly taxes the thing we want to get rid of and is the most effective way to deal with the problem. I accept that if the revenue raised from a carbon tax is not used in an appropriate manner, such a tax is regressive. That is why we have policymakers. They can make policies that counteract the regressiveness. As Professor FitzGerald has pointed out, if half of the revenue is used to reduce other taxes and the other half is used to compensate poorer households, we can get an economic boost from the carbon tax, while fighting the regressiveness of the tax. An appropriate carbon tax policy is not regressive.