 Distributional impacts of energy-heat cross-subsidizationCorbett Grainger, Andrew Schreiber and Fan Zhang Energy Policy, 2019, vol. 125, issue C, 65-81 Abstract: Energy and heat cross-subsidies are common in developing and transitioning countries, but the distributional and efficiency impacts of these policies (and reform) are largely unknown. In Post-Soviet countries such as Belarus, revenues from an industrial tariff on electricity are used to cross-subsidize heating for households. We analyze the distributional impacts of cross-subsidy reform with both input output methods and a calibrated static computable general equilibrium (CGE) model with heterogeneous households based on a household consumption survey. On average, GDP gains of roughly a quarter of a percent are computed across model runs which reduce taxes and subsidies from cross-subsidization. Reducing household heating subsidy rates equally across income groups is found to be regressive. Poorer households are overly-burdened due to higher heating expenditures while richer households enjoy gains from cheaper market prices for goods. The GDP gains are even larger when the tax rates are structured to create a distributionally-neutral reform. Keywords: Input output; Computable general equilibrium; Subsidies; Redistributive effects; Energy prices (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:125:y:2019:i:c:p:65-81 DOI: 10.1016/j.enpol.2018.10.005 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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