Energy Price and Redistribution in Czech Republic

Norbert Ladoux () and Milan Ščasný ()

No 14-527, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: This paper studies environmental taxation in a Mirrlees setting when energy, a polluting good, is used both as a factor of production and a final consumption good. The model is calibrated for the Czech economy. We study two different tax systems. Both consider a non-linear income tax but the first one considers a linear energy tax, while the second one allows for a non-linear taxation of energy. We show that: (i) households' energy consumption should be subsidized except if the environmental external costs of energy consumption are sufficiently high (ii) The subsidy applied to energy consumption should decrease with income.

Keywords: energy tax; Pigouvian tax; redistributive concerns (search for similar items in EconPapers)
JEL-codes: H21 H23 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-ene, nep-env and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:28550

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