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Efficiency and equity aspects of energy taxation

Listed author(s):
  • Vandyck, Toon

We analyse the distributional effects of increased oil excises in Belgium by combining aComputable General Equilibrium (CGE) model with the EUROMOD microsimulation frameworkthat exploits the rich detail of household-level data. The link between the CGE model and themicro level is top-down, feeding changes in commodity prices, factor returns and employment bysector into a non-behavioural microsimulation. The results suggest that policymakers face anequity-efficiency trade-off driven by the choice of revenue recycling options. Distributional effectsof the environmental tax reform appear to depend strongly on changes in factor prices and welfarepayments.

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File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/euromod/em12-13.pdf
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Paper provided by EUROMOD at the Institute for Social and Economic Research in its series EUROMOD Working Papers with number EM12/13.

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Date of creation: 30 Jul 2013
Publication status: published
Handle: RePEc:ese:emodwp:em12-13
Contact details of provider: Postal:
RAB Butler Building, University of Essex, Wivenhoe Park, Colchester, ESSEX C04 3SQ

Phone: +44 (0)1206 872957
Fax: +44 (0)1206 873151
Web page: https://www.iser.essex.ac.uk/euromod/
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  8. Decoster, André & Ochmann, Richard & Spiritus, Kevin, 2013. "Integrating indirect taxation into EUROMOD. Documentation and results for Germany," EUROMOD Working Papers EM20/13, EUROMOD at the Institute for Social and Economic Research.
  9. de Bovenberg, A Lans & Mooij, Ruud A, 1994. "Environmental Levies and Distortionary Taxation," American Economic Review, American Economic Association, vol. 84(4), pages 1085-1089, September.
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  14. Ciscar, Juan-Carlos & Saveyn, Bert & Soria, Antonio & Szabo, Laszlo & Van Regemorter, Denise & Van Ierland, Tom, 2013. "A comparability analysis of global burden sharing GHG reduction scenarios," Energy Policy, Elsevier, vol. 55(C), pages 73-81.
  15. Luc Savard, 2003. "Poverty and Income Distribution in a CGE-Household Micro-Simulation Model: Top-Down/Bottom Up Approach," Cahiers de recherche 0343, CIRPEE.
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  20. Fullerton, Don & Heutel, Garth, 2007. "The general equilibrium incidence of environmental taxes," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 571-591, April.
  21. Thomas F. Rutherford & David G. Tarr, 2014. "Poverty effects of Russia's WTO accession: Modeling “real” households with endogenous productivity effects," World Scientific Book Chapters,in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 12, pages 287-306 World Scientific Publishing Co. Pte. Ltd..
  22. Nicolas Hérault, 2010. "Sequential linking of Computable General Equilibrium and microsimulation models: a comparison of behavioural and reweighting techniques," International Journal of Microsimulation, International Microsimulation Association, vol. 3(1), pages 35-42.
  23. Metcalf, Gilbert E., 1999. "A Distributional Analysis of Green Tax Reforms," National Tax Journal, National Tax Association, vol. 52(4), pages 655-682, December.
  24. S. Proost & D. Regemorter, 1995. "The double dividend and the role of inequality aversion and macroeconomic regimes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 207-219, August.
  25. Shaohua Chen & Martin Ravallion, 2004. "Welfare Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 29-57.
  26. Parry Ian W. H., 1995. "Pollution Taxes and Revenue Recycling," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 64-77, November.
  27. Labandeira, Xavier & Labeaga, José M. & Rodríguez, Miguel, 2009. "An integrated economic and distributional analysis of energy policies," Energy Policy, Elsevier, vol. 37(12), pages 5776-5786, December.
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