EconPapers    
Economics at your fingertips  
 

Lump-sum vs. energy-efficiency subsidy recycling of carbon tax revenue in the residential sector: A French assessment

Cyril Bourgeois, Louis-Gaëtan Giraudet and Philippe Quirion

Ecological Economics, 2021, vol. 184, issue C

Abstract: Empirical evidence suggests that carbon taxes are best accepted when their revenue is used to finance abatement measures. This revenue recycling option has however received little attention in modelling assessments. With the aim of filling this gap, we assess the impact of the French carbon tax on energy use for residential heating and compare the cost-effectiveness and distributional impacts of two revenue recycling options: lump-sum payment and subsidies for home energy retrofits. We do so using Res-IRF, an energy-economy model that provides a highly detailed description of housing features (single vs. multi-family, energy efficiency, heating fuel) and key household characteristics (tenancy status, income). We find that the two recycling options offset the regressive impacts of the tax in comparable ways. Lump-sum recycling is particularly effective in reducing inequalities between owner-occupiers and tenants. In turn, subsidy recycling saves energy and increases comfort more cost-effectively. In the discussion, we further point to some advantages of subsidy recycling from both a political and administrative perspective.

Keywords: Carbon tax; Revenue-recycling; Building sector; Fuel poverty; Energy efficiency subsidies (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0921800921000641
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Lump-sum vs. energy-efficiency subsidy recycling of carbon tax revenue in the residential sector: A French assessment (2021) Downloads
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:eee:ecolec:v:184:y:2021:i:c:s0921800921000641

DOI: 10.1016/j.ecolecon.2021.107006

Access Statistics for this article

Ecological Economics is currently edited by C. J. Cleveland

More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-11-27
Handle: RePEc:eee:ecolec:v:184:y:2021:i:c:s0921800921000641