Distributional effects of emission pricing in a carbon-intensive economy: the case of Poland

Marek Antosiewicz, Rodrigo Fuentes, Piotr Lewandowski and Jan Witajewski-Baltvilks

No 07/2020, IBS Working Papers from Instytut Badan Strukturalnych

Abstract: In this paper, we assess the distributional impact of introducing a carbon tax in Poland. We apply a two- step simulation procedure. First, we evaluate the economy-wide effects with a dynamic general equilibrium model. Second, we use a microsimulation model based on household budget survey data to assess the effects on various income groups and on inequality. We introduce a new adjustment channel related to employment changes, which is qualitatively different from price and behavioural effects, and is quantitatively important. We find that the overall distributional effect of a carbon tax is largely driven by how the revenue is spent: distributing the revenues from a carbon tax as lump-sum transfers to households reduces income inequality, while spending the revenues on a reduction of labour taxation increases inequality. These results could be relevant for other coal-producing countries, such as South Africa, Germany, or Australia

Keywords: climate policy; distribution effect; microsimulation model; general equilibrium model; employment (search for similar items in EconPapers)
JEL-codes: H23 P18 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2020-07
New Economics Papers: this item is included in nep-cmp, nep-ene and nep-env
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https://ibs.org.pl/app/uploads/2020/07/Distributio ... tax_IBS_WP_07_20.pdf English Version

Related works:
Journal Article: Distributional effects of emission pricing in a carbon-intensive economy: The case of Poland (2022)
Working Paper: Distributional Effects of Emission Pricing in a Carbon-Intensive Economy: The Case of Poland (2020)
Working Paper: Distributional Effects of Emission Pricing in a Carbon-Intensive Economy: The Case of Poland (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ibt:wpaper:wp072020

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