A Chinese Sky Trust? Distributional Impacts of Carbon charges and Revenue Recycling in China

James Boyce, Matthew Riddle and Mark D. Brenner

Working Papers from Political Economy Research Institute, University of Massachusetts at Amherst

Abstract: The introduction of carbon charges on the use of fossil fuels in China would have a progressive impact on income distribution. This outcome, which contrasts to the regressive distributional impact found in most studies of carbon charges in industrialized countries, is driven primarily by differences between urban and rural expenditure patterns. If carbon revenues were recycled on an equal per capita basis via a ‘sky trust,’ the progressive impact would be further enhanced: low-income (mainly rural) households would receive more in sky-trust dividends than they pay in carbon charges, and high-income (mainly urban) households would pay more than they receive in dividends. Thus a Chinese sky trust would contribute to both lower fossil fuel consumption and greater income equality.

Keywords: carbon charges; fossil fuels; China; income distribution; carbon revenues; fuel consumption; income equality (search for similar items in EconPapers)
JEL-codes: Q32 Q52 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cna, nep-ene, nep-env, nep-sea and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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