Taxation, Environmental Sustainability, and Distributive Outcomes: Balancing Behavioural Change and Fairness

Abstract The pursuit of measures to enhance the environmental sustainability of societies has shifted to become a core aspect of contemporary public policy. Taxation measures, intended to alter the behaviour of individuals and households, have become a central plank of many nations’ policy response. However, these initiatives arise alongside other taxation and redistributive policy objectives focused on equity. The purpose of this article is to explore the taxation policy design challenges raised by attempts to pursue simultaneously environmental goals and traditional social policy objectives regarding social justice in line with sustainable development principles. Focusing on the experience of two liberal political economies with broadly similar tax structures but whose approach to carbon taxation has varied, Ireland and the UK, the article develops a social policy framework, inspired by the energy justice literature, to facilitate a holistic delineation of the social implications of carbon taxation in the two countries.