Distributional and climate implications of policy responses to energy price shocks

Thiemo Fetzer, Ludovica Gazze and Menna Bishop
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Ludovica Gazze: University of Warwick
Menna Bishop: University of Warwick

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Which households are most affected by energy price shocks? What can we learn about the distributional implications of carbon taxes? How do interventions in energy markets affect these patterns? This paper introduces a measurement framework that leverages granular property-level data representing more than 50% of the English and Welsh housing stock. We use this ex-ante measurement framework to investigate these questions and set out an empirical evaluation framework to study the causal effects of the energy crisis more broadly. We find that the energy price shock has a more pronounced effect on relatively more affluent areas highlighting the likely progressive impact of carbon taxation. We document that commonly used untargeted interventions in energy markets significantly weaken market price signals for able-to-pay households. Alternative, more targeted policies are cheaper, easily implementable, and could better align energy saving incentives.

Keywords: Energy crisis; Carbon taxation; Climate change; Energy efficiency gap JEL Classification: Q48; C55 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur and nep-reg
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Citations: View citations in EconPapers (2)

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https://warwick.ac.uk/fac/soc/economics/research/c ... tions/wp671.2023.pdf

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Journal Article: Distributional and climate implications of policy responses to energy price shocks* (2024)
Working Paper: Distributional and climate implications of policy responses to energy price shocks (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:671

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