Greener and Fairer: A Progressive Environmental Tax Reform for Spain

Christoph Böhringer, Xaquin Garcia-Muros, and Mikel González-Eguino
Authors registered in the RePEc Author Service: Christoph Böhringer and Mikel González-Eguino

Economics of Energy & Environmental Policy, 2019, vol. Volume 8, issue Number 2

Abstract: Environmental externalities call for the use of environmental taxes to get prices right and thereby reduce environmental pressures. To date, however, the Spanish government makes only limited use of environmental taxes. One major reason for the policy reluctance are concerns on the regressive impacts of environmental taxes. We argue that policy can hedge against these concerns by means of revenue recycling. More specifically, we assess the impacts of a green tax reform where additional revenues are redistributed lump-sum to Spanish households on an equal-per-capita basis. Based on quantitative evidence from coupled microsimulation and computable equilibrium analyses we find that such a green tax reform leads to a substantial reduction in harmful emissions while having a progressive impact.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (10)

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