Distributional effects , environmental tax reform , green growth , energy poverty , microsimulation
Abstract:
This paper reviews the literature on distributional effects of energy and carbon taxation with focus on
microsimulation models. Most studies find that direct energy and carbon taxation tends to be
regressive. Regressive effects occur mostly with respect to taxation of electricity or space heating.
Taxation of transportation fuels show less regressive, neutral, or even progressive effects. Adequate
revenue recycling often allows for neutralisation or full elimination of regressive effects so that energy
and carbon tax reforms can be progressive. Some studies find evidence for the existence of a double
dividend. There seems to be an efficiency-equity trade-off in revenue recycling, i.e. whether to foster
growth or to assist low-income households. While a large number of studies on advanced economies
are available, there clearly is a gap with regard to evidence for developing countries. Another gap
relates to the lack of documentation on the challenges of incorporating macroeconomic models and
long-term modelling perspectives in microsimulation. Both aspects can be of great importance with
respect to the design of green growth policies. Thoughtful incorporation of social considerations,
including aspects of poverty in modelling approaches could enhance the existing instruments of exante
policy assessments since poverty is a tangible concept which is well-known, understandable, and
openly observable for citizens and policy makers.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
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