Distributional and climate implications of policy responses to the energy crisis: Lessons from the UK

Thiemo Fetzer, Gazzè, Ludovica and Menna Bishop

No 17990, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Which households are most affected by energy price shocks? What can we learn about the distributional implications of carbon taxes? How do interventions in energy markets affect these patterns? This paper introduces a measurement framework that leverages granular property-level data representing more than 50% of the English and Welsh housing stock. We use this ex-ante measurement framework to investigate these questions and set out an empirical evaluation framework to study the causal effects of the energy crisis more broadly. We find that the energy price shock has a more pronounced effect on relatively more affluent areas highlighting the likely progressive impact of carbon taxation. We document that commonly used untargeted interventions in energy markets significantly weaken market price signals for able-to-pay households. Alternative, more targeted policies are cheaper, easily implementable, and could better align energy saving incentives.

Keywords: Climate change; Environment; Composition of public expenditures (search for similar items in EconPapers)
JEL-codes: C55 Q48 (search for similar items in EconPapers)
Date: 2023-03
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17990 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Distributional and climate implications of policy responses to the energy crisis: Lessons from the UK (2022)
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:cpr:ceprdp:17990

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17990
orders@cepr.org

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by (repec@cepr.org).