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Is There a Green Dividend of National Redistribution?

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  • Eren Gürer
  • Alfons Weichenrieder

Abstract

CO2 emissions are disproportionately caused by more affluent consumers. In the political debate, this fact has triggered the demand for income redistribution and wealth taxes not only to reduce inequality but also to reduce CO2 emissions. This paper calculates the possible size of such a green dividend of redistribution in 26 countries and concludes that, for most EU countries, it is negative if the redistribution is efficient, in the sense that it keeps average incomes constant. If the redistribution introduces inefficiencies that lead to total income losses, the negative green dividend, otherwise associated with additional redistribution, may be avoided.

Suggested Citation

  • Eren Gürer & Alfons Weichenrieder, 2022. "Is There a Green Dividend of National Redistribution?," CESifo Working Paper Series 9986, CESifo.
    • Handle: RePEc:ces:ceswps:_9986
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    More about this item

    Keywords

    environment; redistribution; CO2 emissions; inequality; green dividend;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D30 - Microeconomics - - Distribution - - - General

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