EconPapers    
Economics at your fingertips  
 

Distributional impacts of energy-heat cross-subsidization

Corbett 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)
JEL-codes: D57 D58 H22 H23 Q43 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030142151830658X
Full text for ScienceDirect subscribers only

Related works:
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: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
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2023-01-30
Handle: RePEc:eee:enepol:v:125:y:2019:i:c:p:65-81