Co-benefits of the Irish carbon tax and the European Emissions Trading System on outdoor air pollution in Ireland

Climate policies designed to cut carbon dioxide (CO2) emissions can also reduce harmful air pollutants, delivering health and environmental co-benefits. Using a computable general equilibrium model for Ireland, this paper examines how carbon taxation and the EU Emissions Trading System (ETS) affect non-CO2 pollutants – NOx, SOx, NH3, PM2.5, PM10, and NMVOC. SOx declines more than CO2 under both policies. Carbon taxation results in greater reductions in transport, services, residential, and agricultural pollutants, whereas sectors covered by the ETS experience larger reductions when ETS prices rise. The response of NH3 emissions is minimal, highlighting the need for specific air pollution measures.