Facebook LinkedIn Youtube Twitter
Shop

IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

The Vertical and Horizontal Distributive Effects of Energy Taxes: A Case Study of a French Policy

Abstract:
This paper proposes a micro-simulation assessment of the distributional impacts of the French carbon tax. It shows that the policy is regressive, but could be made progressive by redistributing the revenue through flat-recycling. However, it would still generate large horizontal distributive effects and harm a significant share of low-income households. The determinants of the tax incidence are characterized precisely, and alternative targeted transfers are simulated on this basis. The paper shows that given the importance of unobserved heterogeneity in the determinants of energy consumption, horizontal distributive effects are much more difficult to tackle than vertical ones.

Purchase ( $25 )

Keywords: Energy taxes; Carbon tax; Distributional effects; Demand system; Micro-simulation

DOI: 10.5547/01956574.41.3.tdou

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.


Published in Volume 41, Number 3 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.