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

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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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    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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    1. 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.

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    More about this item

    Keywords

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

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • P18 - Economic Systems - - Capitalist Systems - - - 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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