The vertical and horizontal distributive effects of energy taxes

Thomas Douenne (t.r.g.r.douenne@uva.nl)

No 2018.05, Policy Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: This paper proposes a micro-simulation assessment of the distributional impacts of the French carbon tax. It shows that the policy is regressive, but could be made progressive by redistributing the revenue through a flat-recycling. However, it would still generate large horizontal distributive effects and harm an important share of low-income households. The determinants of the tax incidence are characterized precisely, and alternative targeted transfers are simulated on this basis. The paper shows that given the importance of unobserved heterogeneity in the determinants of energy consumption, horizontal distributive effects are much more difficult to tackle than vertical ones.

Keywords: Energy taxes; Distributional effects; Demand-System; Micro-simulation (search for similar items in EconPapers)
JEL-codes: D12 H23 I32 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2018-09
New Economics Papers: this item is included in nep-ene and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://faere.fr/pub/PolicyPapers/Douenne_FAERE_PP2018.05.pdf First version, 2018 (application/pdf)

Related works:
Working Paper: The vertical and horizontal distributive effects of energy taxes (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:fae:ppaper:2018.05

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