Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence

Arik Levinson

Journal of the Association of Environmental and Resource Economists, 2019, vol. 6, issue S1, S7 - S36

Abstract: Economists endorse taxes as a cost-effective means of reducing pollution. But policy makers raise concerns about their regressivity, or disproportional burden on poorer families, preferring instead to regulate energy efficiency. I first show that in theory, energy efficiency standards are more regressive than energy taxes, not less. I then provide an example using data on automobiles in the United States. Taxing gas would be less regressive than regulating the fuel economy of cars if the two policies are compared on a revenue-equivalent basis.

Date: 2019
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Related works:
Working Paper: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2018)
Working Paper: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2017)
Chapter: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2016)
Working Paper: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2016)
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