An integrated economic and distributional analysis of energy policies
AbstractMost public policies, particularly those in the energy sphere, have not only efficiency but also distributional effects. However, there is a trade-off between modelling approaches suitable for calculating those impacts on the economy. For the former most of the studies have been conducted with general equilibrium models, whereas partial equilibrium models represent the main approach for distributional analysis. This paper proposes a methodology to simultaneously carry out an analysis of the distributional and efficiency consequences of changes in energy taxation. In order to do so, we have integrated a microeconomic household demand model and a computable general equilibrium model for the Spanish economy. We illustrate the advantages of this approach by simulating a revenue-neutral reform in Spanish indirect taxation, with a large increase of energy taxes that serve an environmental purpose. The results show that the reforms bring about significant efficiency and distributional effects, in some cases counterintuitive, and demonstrate the academic and social utility of this approximation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 37 (2009)
Issue (Month): 12 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/enpol
General equilibrium Microeconomic Modelling Distribution;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maurizio Bussolo & Jann Lay, 2003. "Globalisation and Poverty Changes in Colombia," OECD Development Centre Working Papers 226, OECD Publishing.
- Ian W. H. Parry & Roberton C. Williams III & Lawrence H. Goulder, 1997.
"When Can Carbon Abatement Policies Increase Welfare? The Fundamental Role of Distorted Factor Markets,"
NBER Working Papers
5967, National Bureau of Economic Research, Inc.
- Parry, Ian W. H. & Williams, Roberton III & Goulder, Lawrence H., 1999. "When Can Carbon Abatement Policies Increase Welfare? The Fundamental Role of Distorted Factor Markets," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 52-84, January.
- Parry, Ian & Goulder, Lawrence & Williams III, Roberton, 1997. "When Can Carbon Abatement Policies Increase Welfare? The Fundamental Role of Distorted Factor Markets," Discussion Papers dp-97-18-rev, Resources For the Future.
- François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003.
"Representative versus real households in the macro-economic modeling of inequality,"
DELTA Working Papers
2003-05, DELTA (Ecole normale supérieure).
- François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," Working Papers DT/2003/10, DIAL (Développement, Institutions et Mondialisation).
- Sherman, Robinson & Robilliard, Anne-Sophie & Bourguignon, François, 2005. "Representative versus real households in the macro-economic modelling of inequality," Economics Papers from University Paris Dauphine 123456789/4535, Paris Dauphine University.
- Miguel Rodríguez & José M. Labeaga, 2004.
"Microsimulating the Effects of Household Energy Price Changes in Spain,"
2004.161, Fondazione Eni Enrico Mattei.
- Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, . "Microsimulating the Effects of Household Energy Price Changes in Spain," Studies on the Spanish Economy 196, FEDEA.
- Xavier Labandeira & Jose M. Labeaga & Miguel Rodriguez, 2004. "Microsimulating the Effects of Household Energy Price Changes in Spain," Public Economics 0412001, EconWPA, revised 02 Dec 2004.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- Turid Åvitsland & Jørgen Aasness, 2004. "Combining CGE and microsimulation models: Effects on equality of VAT reforms," Discussion Papers 392, Research Department of Statistics Norway.
- Luc Savard, 2004.
"Poverty and Inequality Analysis within a CGE Framework: a Comparative Analysis of the Representative Agent and Micro-Simulation Approaches,"
Cahiers de recherche
- Luc Savard, 2005. "Poverty and Inequality Analysis within a CGE Framework: A Comparative Analysis of the Representative Agent and Microsimulation Approaches," Development Policy Review, Overseas Development Institute, vol. 23(3), pages 313-331, 05.
- Tim Callan & Sean Lyons & Sue Scott & Richard S. J. Tol & Stefano Verde, 2008.
"The Distributional Implications of a Carbon Tax in Ireland,"
WP250, Economic and Social Research Institute (ESRI).
- Callan, Tim & Lyons, Sean & Scott, Susan & Tol, Richard S.J. & Verde, Stefano, 2009. "The distributional implications of a carbon tax in Ireland," Energy Policy, Elsevier, vol. 37(2), pages 407-412, February.
- Brännlund, Runar & Nordström, Jonas, 1999.
"Carbon Tax Simulations Using a Household Demand Model,"
UmeÃ¥ Economic Studies
508, Umeå University, Department of Economics.
- Brannlund, Runar & Nordstrom, Jonas, 2004. "Carbon tax simulations using a household demand model," European Economic Review, Elsevier, vol. 48(1), pages 211-233, February.
- Baker, Paul & Blundell, Richard & Micklewright, John, 1989. "Modelling Household Energy Expenditures Using Micro-data," Economic Journal, Royal Economic Society, vol. 99(397), pages 720-38, September.
- Xavier Labandeira & José M. Labeaga, 1999. "Combining input-output analysis and micro-simulation to assess the effects of carbon taxation on Spanish households," Fiscal Studies, Institute for Fiscal Studies, vol. 20(3), pages 305-320, September.
- Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2005.
"A Residential Energy Demand System for Spain,"
- Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
- Ballard, Charles L & Shoven, John B & Whalley, John, 1985. "General Equilibrium Computations of the Marginal Welfare Costs of Taxes in the United States," American Economic Review, American Economic Association, vol. 75(1), pages 128-38, March.
- Newbery, D., 2005. "Why Tax Energy? Towards a More Rational Energy Policy," Cambridge Working Papers in Economics 0508, Faculty of Economics, University of Cambridge.
- Oladosu, Gbadebo & Rose, Adam, 2007. "Income distribution impacts of climate change mitigation policy in the Susquehanna River Basin Economy," Energy Economics, Elsevier, vol. 29(3), pages 520-544, May.
- Nicol, C. J., 2003. "Elasticities of demand for gasoline in Canada and the United States," Energy Economics, Elsevier, vol. 25(2), pages 201-214, March.
- Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
- Rolf Aaberge & Ugo Colombino & Erling Holmøy & Birger Strøm & Tom Wennemo, 2004.
"Population ageing and fiscal sustainability: An integrated micro-macro analysis of required tax changes,"
CHILD Working Papers
wp06_04, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Rolf Aaberge & Ugo Colombino & Erling Holmøy & Birger Strøm & Tom Wennemo, 2004. "Population ageing and fiscal sustainability: An integrated micro-macro analysis of required tax changes," Discussion Papers 367, Research Department of Statistics Norway.
- Shoven,John B. & Whalley,John, 1992.
"Applying General Equilibrium,"
Cambridge University Press, number 9780521319867, December.
- Kemfert, Claudia & Welsch, Heinz, 2000. "Energy-Capital-Labor Substitution and the Economic Effects of CO2 Abatement: Evidence for Germany," Journal of Policy Modeling, Elsevier, vol. 22(6), pages 641-660, November.
- Jan van Heerden & Reyer Gerlagh & James Blignaut & Mark Horridge & Sebastiaan Hess & Ramos Mabugu & Margaret Mabugu, 2006. "Searching for Triple Dividends in South Africa: Fighting CO2 Pollution and Poverty while Promoting Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 113-142.
- Wier, Mette & Birr-Pedersen, Katja & Jacobsen, Henrik Klinge & Klok, Jacob, 2005. "Are CO2 taxes regressive? Evidence from the Danish experience," Ecological Economics, Elsevier, vol. 52(2), pages 239-251, January.
- David M. Newbery, 2005. "Why Tax Energy? Towards a More Rational Policy," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-40.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- Peichl, Andreas, 2008.
"The Benefits of Linking CGE and Microsimulation Models: Evidence from a Flat Tax Analysis,"
IZA Discussion Papers
3715, Institute for the Study of Labor (IZA).
- Peichl, Andreas, 2008. "The benefits of linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," FiFo Discussion Papers - Finanzwissenschaftliche DiskussionsbeitrÃ¤ge 08-6, University of Cologne, FiFo Institute for Public Economics.
- Bohringer, Christoph & Rutherford, Thomas F., 1997. "Carbon Taxes with Exemptions in an Open Economy: A General Equilibrium Analysis of the German Tax Initiative," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 189-203, February.
- Roberts, Simon, 2008. "Energy, equity and the future of the fuel poor," Energy Policy, Elsevier, vol. 36(12), pages 4471-4474, December.
- Tiezzi, Silvia, 2005. "The welfare effects and the distributive impact of carbon taxation on Italian households," Energy Policy, Elsevier, vol. 33(12), pages 1597-1612, August.
- Elizabeth Symons & John Proops & Philip Gay, 1994. "Carbon taxes, consumer demand and carbon dioxide emissions: a simulation analysis for the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(2), pages 19-43, May.
- Healy, John D. & Clinch, J. Peter, 2004. "Quantifying the severity of fuel poverty, its relationship with poor housing and reasons for non-investment in energy-saving measures in Ireland," Energy Policy, Elsevier, vol. 32(2), pages 207-220, January.
- Cogneau, Denis & Robilliard, Anne-Sophie, 2000. "Growth, distribution and poverty in Madagascar," TMD discussion papers 61, International Food Policy Research Institute (IFPRI).
- Davies, James B., 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Vandyck, Toon, 2013. "Efficiency and Equity Aspects of Energy Taxation," EUROMOD Working Papers EM12/13, EUROMOD at the Institute for Social and Economic Research.
- Wang, Bing & Kocaoglu, Dundar F. & Daim, Tugrul U. & Yang, Jiting, 2010. "A decision model for energy resource selection in China," Energy Policy, Elsevier, vol. 38(11), pages 7130-7141, November.
- Xavier Labandeira, Pedro Linares and Miguel Rodriguez, 2009.
"An Integrated Approach to Simulate the impacts of Carbon Emissions Trading Schemes,"
The Energy Journal,
International Association for Energy Economics, vol. 0(Special I).
- Xavier Labandeira Villot & Pedro Linares & Miguel Rodríguez, 2009. "An Integrated Approach to Simulate the Impacts of Carbon Emissions Trading Schemes," Working Papers 2009-29, FEDEA.
- Childs, Jack, 2012. "Kyoto and the EU CEP 2020: A Dynamic Study of the impacts on the Agricultural Sector in Spain," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135074, Agricultural Economics Society.
- Akkemik, K. Ali, 2011. "Potential impacts of electricity price changes on price formation in the economy: a social accounting matrix price modeling analysis for Turkey," Energy Policy, Elsevier, vol. 39(2), pages 854-864, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.