On the emissions-inequality trade-off in energy taxation: Evidence on the German car fuel tax

Dragana Nikodinoska and Carsten Schröder

No 2015/6, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: By using estimates from an Almost Ideal Demand System (AIDS), we investigate how the German energy tax on car fuels changes the private households-CO2 emissions, living standards, and post-tax income distribution. Our results show that the tax implies a trade-off between the aim to reduce emissions and vertical equity, which refers to the idea that people with a greater ability to pay taxes should pay more.

Keywords: energy taxes; environmental taxes; energy demand; emissions; tax incidence; redistribution; inequality (search for similar items in EconPapers)
JEL-codes: C31 D12 D63 H22 H23 I3 K32 Q21 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-mfd, nep-reg and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:20156

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