Toward a just energy transition: A distributional analysis of low-carbon policies in the USA

Journal Article
Toward a just energy transition: A distributional analysis of low-carbon policies in the USA
García-Muros, X., J. Morris and S. Paltsev (2022)
Energy Economics, 105 (105769) (doi: 10.1016/j.eneco.2021.105769)

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Abstract/Summary:

Abstract: Distributional impacts of environmental policies have become an increasingly important consideration in policymaking.

To evaluate the distributional impacts of carbon pricing with different revenue recycling schemes for the USA, we integrate a national economic model for the USA with household microdata that provides consumption patterns and other socio-economic characteristics for thousands of households. Using this combined model, we explore the distributional impacts and the possible trade-offs between equity and efficiency of different revenue recycling schemes.

We find that the choice of revenue recycling scheme has a limited effect on efficiency of the policy, but significant distributional impacts. Our analysis indicates that policymakers can mitigate negative distributional impacts with positive synergies on efficiency.

Citation:

García-Muros, X., J. Morris and S. Paltsev (2022): Toward a just energy transition: A distributional analysis of low-carbon policies in the USA. Energy Economics, 105 (105769) (doi: 10.1016/j.eneco.2021.105769) (https://www.sciencedirect.com/science/article/pii/S0140988321006113?via%3Dihub)

Supersedes:

Report 354. Distributional Impacts of Low-Carbon Policies in USA and Spain: Does One Size Fit All? (Joint Program Report Series, 2021)
  • Journal Article
Toward a just energy transition: A distributional analysis of low-carbon policies in the USA

García-Muros, X., J. Morris and S. Paltsev

Energy Economics
105 (105769) (doi: 10.1016/j.eneco.2021.105769)
2021

Abstract/Summary: 

Abstract: Distributional impacts of environmental policies have become an increasingly important consideration in policymaking.

To evaluate the distributional impacts of carbon pricing with different revenue recycling schemes for the USA, we integrate a national economic model for the USA with household microdata that provides consumption patterns and other socio-economic characteristics for thousands of households. Using this combined model, we explore the distributional impacts and the possible trade-offs between equity and efficiency of different revenue recycling schemes.

We find that the choice of revenue recycling scheme has a limited effect on efficiency of the policy, but significant distributional impacts. Our analysis indicates that policymakers can mitigate negative distributional impacts with positive synergies on efficiency.

Supersedes: 

Distributional Impacts of Low-Carbon Policies in USA and Spain: Does One Size Fit All?

Posted to public: 

Monday, December 13, 2021 - 11:33