EU-Type Carbon Emissions Trade and the Distributional Impact of Overlapping Emissions Taxes
AbstractThe European Union fulfills its emissions reductions commitments by means of an emissions trading scheme covering some part of each member state’s economy and by national emissions control in the rest of their economies. The member states also levy energy/emissions taxes overlapping with the trading scheme. Restricting our focus on cost-effective policies, this paper investigates the distributive consequences of increasing the overlapping emissions tax that is uniform across countries. For quasi-linear utility functions and for a class of parametric utility and production functions emissions tax increases turn out to be exactly offset by permit price reductions. As a consequence permit-exporting [permit-importing] countries lose [gain] from an increase in the emissions tax. These results are not general, however. By means of a numerical example we show that export-import reversals and welfare reversals are possible.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2579.
Date of creation: 2009
Date of revision:
emissions taxes; emissions trading; international trade;
Other versions of this item:
- Thomas Eichner & Rüdiger Pethig, 2010. "EU-type carbon emissions trade and the distributional impact of overlapping emissions taxes," Journal of Regulatory Economics, Springer, vol. 37(3), pages 287-315, June.
- Thomas Eichner & Rüdiger Pethig, 2009. "EU-type carbon emissions trade and the distributional impact of overlapping emissions taxes," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 134-09, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- 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
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.:
- Shiell, Leslie, 2003. "Equity and efficiency in international markets for pollution permits," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 38-51, July.
- Steven Sorrell, 2003. "Carbon Trading in the Policy Mix," Oxford Review of Economic Policy, Oxford University Press, vol. 19(3), pages 420-437.
- Margarita Robaina Alves & Miguel Rodríguez & Catarina Roseta-Palma, 2010.
"Sectoral and regional impacts of the European Carbon Market in Portugal,"
0021, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised Jul 2010.
- Robaina Alves, Margarita & Rodríguez, Miguel & Roseta-Palma, Catarina, 2011. "Sectoral and regional impacts of the European carbon market in Portugal," Energy Policy, Elsevier, vol. 39(5), pages 2528-2541, May.
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