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Toward a just energy transition: A distributional analysis of low-carbon policies in the USA

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  • García-Muros, Xaquín
  • Morris, Jennifer
  • Paltsev, Sergey

Abstract

Distributional impacts of environmental policies have become an increasingly important consideration in policymaking. To evaluate the distributional impacts of carbon pricing with different revenue recycling schemes for the USA, we integrate national economic model for the USA with household microdata that provides consumption patterns and other socio-economic characteristics for thousands of households. Using this combined model, we explore the distributional impacts and the possible trade-offs between equity and efficiency of different revenue recycling schemes. We find that the choice of revenue recycling scheme has a limited effect on efficiency of the policy, but significant distributional impacts. Our analysis indicates that policy makers can mitigate negative distributional impacts with positive synergies on efficiency.

Suggested Citation

  • García-Muros, Xaquín & Morris, Jennifer & Paltsev, Sergey, 2022. "Toward a just energy transition: A distributional analysis of low-carbon policies in the USA," Energy Economics, Elsevier, vol. 105(C).
    • Handle: RePEc:eee:eneeco:v:105:y:2022:i:c:s0140988321006113
    DOI: 10.1016/j.eneco.2021.105769
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    Cited by:

    1. Pan, Xiongfeng & Wang, Mengyang & Li, Mengna, 2023. "Low-carbon policy and industrial structure upgrading: Based on the perspective of strategic interaction among local governments," Energy Policy, Elsevier, vol. 183(C).
    2. Chishti, Muhammad Zubair & Sinha, Avik & Zaman, Umer & Shahzad, Umer, 2023. "Exploring the dynamic connectedness among energy transition and its drivers: Understanding the moderating role of global geopolitical risk," Energy Economics, Elsevier, vol. 119(C).
    3. de Bruin, Kelly & Yakut, Aykut Mert, 2024. "Efficiency–equity trade-off in the Irish carbon tax: A CGE investigation of mixed revenue recycling schemes," Economic Modelling, Elsevier, vol. 134(C).
    4. Hu, Haisheng & Zhao, Laijun & Dong, Wanhao, 2023. "How to achieve the goal of carbon peaking by the energy policy? A simulation using the DCGE model for the case of Shanghai, China," Energy, Elsevier, vol. 278(PA).
    5. Dong, Zhaoyingzi & Xiao, Yue, 2024. "Carbon emissions trading policy and climate injustice: A study on economic distributional impacts," Energy, Elsevier, vol. 296(C).

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    More about this item

    Keywords

    Carbon pricing; Distributional impacts; Microsimulation; Computable general equilibrium;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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