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

Arik Levinson ()

Working Papers from Georgetown University, Department of Economics

Abstract: Economists promote energy taxes as cost-effective. But policymakers raise concerns about their regressivity, or disproportional burden on poorer families, preferring to set energy efficiency standards instead. I first show that in theory, regulations targeting energy efficiency are more regressive than energy taxes, not less. I then provide an example in the context of automotive fuel consumption 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.

Keywords: Regulation; Income Distribution; Pigouvian Tax (search for similar items in EconPapers)
Pages: 34
Date: 2017-08-31
New Economics Papers: this item is included in nep-ene and nep-tre
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http://faculty.georgetown.edu/aml6/pdfs&zips/RegressiveMandates.pdf Full text (application/pdf)
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Related works:
Journal Article: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2019)
Working Paper: Energy Efficiency Standards Are More Regressive Than Energy Taxes: Theory and Evidence (2018)
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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