Dr. Muireann Lynch joins to discuss why economists love carbon taxes so much. We go through the economic reasoning behind a carbon tax, we discuss why a carbon tax is better than a subsidy and we debate the various ways carbon tax revenues can be redistributed to householders.

Practice often differs to theory and we discuss some of the peculiarities surrounding carbon taxation in Ireland and the EU. We explain the waterbed effect and why renewable energy subsidies do not necessarily reduce emissions. We also discuss the pitfalls of renewable energy promotion as a means of industrial strategy and Ireland's close call with wave energy.

Links to some of Muireann's papers on this topic are available on IrishEconPod.com

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