Dr. Niall Farrell:

I agree 100%. It is a very important point when it comes to thinking about carbon taxes. It is a suite of policies. There is the carbon tax, plus the fact that revenue has been raised through that carbon tax and how it is decided to distribute that. There are a range of ways to do it. It could be done by taxing benefits and targeting them.

It depends on the social objectives. If we want to target those who are less well off, the tax and welfare systems can be used. Lump sum transfers can be done so that everybody gets the same amount or a mix of both can be done. Something can be given to those who are less well off and then something to everybody else as well. There are a range of ways this can be done to try to help those who are not so well off.