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Toward a just energy transition: A distributional analysis of low-carbon policies in the USA

Xaquín García-Muros, Jennifer Morris and Sergey Paltsev

Energy Economics, 2022, vol. 105, issue C

Abstract: Distributional impacts of environmental policies have become an increasingly important consideration in policymaking. To evaluate the distributional impacts of carbon pricing with different revenue recycling schemes for the USA, we integrate national economic model for the USA with household microdata that provides consumption patterns and other socio-economic characteristics for thousands of households. Using this combined model, we explore the distributional impacts and the possible trade-offs between equity and efficiency of different revenue recycling schemes. We find that the choice of revenue recycling scheme has a limited effect on efficiency of the policy, but significant distributional impacts. Our analysis indicates that policy makers can mitigate negative distributional impacts with positive synergies on efficiency.

Keywords: Carbon pricing; Distributional impacts; Microsimulation; Computable general equilibrium (search for similar items in EconPapers)
JEL-codes: D3 D58 H23 Q58 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.eneco.2021.105769

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