Assessing the Distributional Impacts of Carbon Tax among Households across Different Income Groups: The Case of China

Qiao-Mei Liang, Qian Wang and Yi-Ming Wei

Energy & Environment, 2013, vol. 24, issue 7-8, 1323-1346

Abstract: Employing the improved China Energy and Environmental Policy Analysis (CEEPA) model, a recursive dynamic computable general equilibrium model, this study aims to examine the distributional impacts of a carbon tax in China on households over different income groups. The effects of different complementary measures were also analysed. The results indicate that without any protections for households, a carbon tax will widen the income and welfare gap not only between urban and rural but also within urban groups, though it could have a weakly progressive effect within the rural. If the carbon tax revenue is used to reduce indirect tax whilst appropriately increasing government transfers to rural households and vulnerable urban groups in proportion to population, the distributional deterioration caused by the carbon tax could be effectively mitigated, and the negative impact on the living standards of households over all income groups could be alleviated while maintaining emission reductions and minimising the overall socio-economic impacts.

Keywords: Carbon tax; Income groups; Distributional impacts; Complementary measures (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1260/0958-305X.24.7-8.1323 (text/html)

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:sae:engenv:v:24:y:2013:i:7-8:p:1323-1346

DOI: 10.1260/0958-305X.24.7-8.1323

Access Statistics for this article

More articles in Energy & Environment
Bibliographic data for series maintained by SAGE Publications ().