Efficient and Equitable Policy Design: Taxing Energy Use or Promoting Energy Savings?

Florian Landis, Sebastian Rausch, Mirjam Kosch, and Christoph Böhringer
Authors registered in the RePEc Author Service: Sebastian Rausch and Christoph Böhringer

The Energy Journal, 2019, vol. Volume 40, issue Number 1

Abstract: Should energy use be lowered by using broad-based taxes or through promoting and mandating energy savings through command-and-control measures and targeted subsidies? We integrate a micro-simulation analysis, based on a representative sample of 9,734 households of the Swiss population, into a numerical general equilibrium model to examine the efficiency and equity implications of these alternative regulatory approaches. We find that at the economy-wide level taxing energy is five times more cost-effective than promoting energy savings. About 36% of households gain under tax-based regulation while virtually all households are worse off under a promotion-based policy. Tax-based regulation, however, yields a substantial dispersion in household-level impacts whereas heterogeneous household types are similarly affected under a promotion-based approach. Our analysis points to important trade-offs between efficiency and equity in environmental policy design.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.iaee.org/en/publications/ejarticle.aspx?id=3278 (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
Journal Article: Efficient and Equitable Policy Design: Taxing Energy Use or Promoting Energy Savings? (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aen:journl:ej40-1-rausch

Ordering information: This journal article can be ordered from
http://www.iaee.org/en/publications/ejsearch.aspx

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().