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Mardi 6 juillet 2021

Philipp Richter (TU Dresden) présentera "Distributional effects of environmental policy".

Résumé :

This paper focuses on the distributional effects of emissions pricing and tax revenue redistribution in a general equilibrium model with heterogeneous agents. For this purpose, we set up a model based on the occupational choice decisions of individuals and highlight selection effects in response to policy changes. We present two applications. Application I analyses the impact of a unilateral increase in the emissions tax of an economy open to international trade. We find a tax-induced change in occupational choices, an increase in average productivity of domestic firms, negative emissions leakage and an increase in the reforming country’s income inequality. We derive as key mechanism the change in the relative market sizes of the reforming and non-reforming country. Application II analyses the impact of a progressive redistribution scheme with transfers only to low-income individuals in a closed economy. We find that for a given emissions tax a progressive redistribution scheme leads to a shift in the factor allocation towards more employees and fewer but more productive firms compared to a uniform per capita transfer scheme. This distortion leads to reduced aggregate emissions but increased income inequality between managers and employees.