Distributional Impacts of Energy Taxes

William Pizer and Steven Sexton

No 23318, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Despite popularity among economists for their efficiency, energy pollution taxes enjoy less political support than standards-based regulation because of common perceptions that they burden the poor relative to the rich. However, the literature on pollution tax incidence and consumption surveys in Mexico, the United Kingdom, and the United States, suggest energy taxes need not be as regressive as often assumed. This paper demonstrates that the incidence of such taxes varies according to the energy commodities that are taxed, the physical, social and climatic characteristics of jurisdictions in which they are implemented, and how the revenue is used. It is also shown that the variation in household energy expenditure within income groups is greater than variation across income groups in many cases. These horizontal equity impacts are reviewed, as are their implications for policy making.

JEL-codes: H22 Q41 Q48 (search for similar items in EconPapers)
Date: 2017-04
New Economics Papers: this item is included in nep-ene, nep-pbe, nep-pub and nep-reg
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Published as William A Pizer & Steven Sexton, 2019. "The Distributional Impacts of Energy Taxes," Review of Environmental Economics and Policy, vol 13(1), pages 104-123.

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Journal Article: The Distributional Impacts of Energy Taxes (2019)
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