Who pays for higher carbon prices?: Illustration for Lithuania and a research agenda

Herwig Immervoll, Cathal O’Donoghue, Jules Linden and Denisa Sologon
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Cathal O’Donoghue: University of Galway
Jules Linden: University of Galway

No 283, OECD Social, Employment and Migration Working Papers from OECD Publishing

Abstract: This paper lays out an approach, and a research agenda, for assessing the impact of carbon pricing on household budgets. It relies on a rich set of available data and policy models and combines them in a way that is informative for mapping the gains and losses at the household level in the short term as countries transition to a low-carbon economy. After accounting for direct burdens from higher fuel prices, indirect effects from higher prices of goods other than fuel, and households’ behavioural responses, overall burdens are only mildly regressive. Recycling carbon-tax revenues back to households allows considerable scope for avoiding or cushioning losses for large parts of the population, and existing policy models can be used to design compensation measures that facilitate majority support for carbon tax packages.

Keywords: Carbon tax; Carbon tax; climate change; inequality; revenue recycling (search for similar items in EconPapers)
JEL-codes: C8 D12 D31 H23 Q52 (search for similar items in EconPapers)
Date: 2023-01-30
New Economics Papers: this item is included in nep-ene, nep-env and nep-pub
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Citations: View citations in EconPapers (3)

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https://doi.org/10.1787/8f16f3d8-en (text/html)

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Working Paper: Who Pays for Higher Carbon Prices? Illustration for Lithuania and a Research Agenda (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:oec:elsaab:283-en

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