Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence

Arik Levinson

No 22956, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Economists promote energy taxes as cost-effective. But policymakers raise concerns about their regressivity, or disproportional burden on poorer families, preferring to set energy efficiency standards instead. I first show that in theory, regulations targeting energy efficiency are more regressive than energy taxes, not less. I then provide an example in the context of automotive fuel consumption in the United States: taxing gas would be less regressive than regulating the fuel economy of cars if the two policies are compared on a revenue-equivalent basis.

JEL-codes: H23 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-ene, nep-pub and nep-tre
Note: EEE PE
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Citations: View citations in EconPapers (10)

Published as Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence , Arik Levinson. in Energy Policy Tradeoffs between Economic Efficiency and Distributional Equity , Deryugina, Fullerton, and Pizer. 2019
Published as Arik Levinson, 2019. "Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence," Journal of the Association of Environmental and Resource Economists, vol 6(S1), pages S7-S36.

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Related works:
Working Paper: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2018)
Working Paper: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2017)
Chapter: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2016)
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