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Distributional Effects of Emission Pricing in a Carbon-Intensive Economy: The Case of Poland

Author

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  • Antosiewicz, Marek

    (Institute for Structural Research (IBS))

  • Fuentes, J. Rodrigo

    (University of Chile)

  • Lewandowski, Piotr

    (Institute for Structural Research (IBS))

  • Witajewski-Baltvilks, Jan

    (Institute for Structural Research (IBS))

Abstract

In this paper, we assess the distributional impact of introducing a carbon tax in Poland. We apply a two-step simulation procedure. First, we evaluate the economy-wide effects with a dynamic general equilibrium model. Second, we use a microsimulation model based on household budget survey data to assess the effects on various income groups and on inequality. We introduce a new adjustment channel related to employment changes, which is qualitatively different from price and behavioural effects, and is quantitatively important. We nd that the overall distributional effect of a carbon tax is largely driven by how the revenue is spent: distributing the revenues from a carbon tax as lump-sum transfers to households reduces income inequality, while spending the revenues on a reduction of labour taxation increases inequality. These results could be relevant for other coal-producing countries, such as South Africa, Germany, or Australia.

Suggested Citation

  • Antosiewicz, Marek & Fuentes, J. Rodrigo & Lewandowski, Piotr & Witajewski-Baltvilks, Jan, 2020. "Distributional Effects of Emission Pricing in a Carbon-Intensive Economy: The Case of Poland," IZA Discussion Papers 13481, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp13481
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Distributional Effects of Emission Pricing in a Carbon-Intensive Economy: The Case of Poland
      by Christian Zimmermann in NEP-DGE blog on 2021-08-08 16:24:31

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    Cited by:

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    3. Rodríguez, M. & Teotónio, C. & Roebeling, P. & Fortes, P., 2023. "Targeting energy savings? Better on primary than final energy and less on intensity metrics," Energy Economics, Elsevier, vol. 125(C).
    4. Zhao, Jiqiang & Wu, Xianhua & Guo, Ji & Gao, Chao, 2022. "Allocation of SO2 emission rights in city agglomerations considering cross-border transmission of pollutants: A new network DEA model," Applied Energy, Elsevier, vol. 325(C).
    5. Jakub Sokolowski & Marek Antosiewicz & Piotr Lewandowski, 2022. "The economic effects of stopping Russian energy Import in Poland," IBS Research Reports 01/2022, Instytut Badan Strukturalnych.
    6. Sokołowski, Jakub, 2023. "Peer effects on photovoltaics (PV) adoption and air quality spillovers in Poland," Energy Economics, Elsevier, vol. 125(C).
    7. Kettner, Claudia & Leoni, Thomas & Köberl, Judith & Kortschak, Dominik & Kirchner, Mathias & Sommer, Mark & Wallenko, Laura & Bachner, Gabriel & Mayer, Jakob & Spittler, Nathalie & Kulmer, Veronika, 2024. "Modelling the economy-wide effects of unilateral CO2 pricing under different revenue recycling schemes in Austria – Searching for a triple dividend," Energy Economics, Elsevier, vol. 137(C).
    8. Cathal ODonoghue & Beenish Amjad & Jules Linden & Nora Lustig & Denisa Sologon & Yang Wang, 2023. "The Distributional Impact of Inflation in Pakistan: A Case Study of a New Price Focused Microsimulation Framework, PRICES," Papers 2310.00231, arXiv.org, revised Mar 2024.
    9. Jia, Zhijie & Wen, Shiyan & Liu, Yu, 2022. "China's urban-rural inequality caused by carbon neutrality: A perspective from carbon footprint and decomposed social welfare," Energy Economics, Elsevier, vol. 113(C).
    10. Daniela Kletzan-Slamanig & Claudia Kettner, 2023. "Energy, Greenhouse Gas Emissions and Climate Policies – Austria and Poland Compared," WIFO Working Papers 661, WIFO.
    11. Jakub Sokołowski & Piotr Lewandowski & Jan Frankowski, 2023. "How to Prevent Yellow Vests? Evaluating Preferences for a Carbon Tax with a Discrete Choice Experiment," IBS Working Papers 03/2023, Instytut Badan Strukturalnych.

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    More about this item

    Keywords

    general equilibrium; climate policy; carbon tax; distributional effect; microsimulation; employment;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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