Who Pays a Price on Carbon?

By Corbett A. Grainger, Charles D. Kolstad. 2009

292 citations recorded by the source corpus.

We use the 2003 Consumer Expenditure Survey and emissions estimates from an input-output model based on the 1997 US economy to estimate the incidence of a price on carbon induced by a cap-and-trade program or carbon tax in the context of the US. We present results on how much different income deciles pay for a carbon tax as well as which industries see the largest increase in costs due to a carbon tax. We illustrate the main determinant of the regressivity: consumption patterns for energy-intensive goods. Furthermore, on a per-capita basis a carbon price is much more regressive than calculations at the household level. We discuss policy options to offset the adverse distributional effects of a carbon emissions policy.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/71cd4bebb0bedc2c7d38431b995bf1c825103144

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Citations in the corpus

Who emits most? Associations between socio-economic factors and UK households' home energy, transport, indirect and total CO2 emissions (2013, background): “…unfair tax burdens.11 Given that fairness claims are usually expressed in a general way or in relation to just one area of emissions (e.g. Barnes, 2003; DEFRA, 2008; Dresner and Ekins, 2006; Grainger and Kolstad, 2010; Starkey, 2008), insights can be gained by comparing different emission domains.”
The Carbon Footprint of Norwegian Household Consumption 1999–2012 (2016, background): “…from various angles (Sastry et al. 1989; Wier et al. 2001; Lenzen et al. 2006; Roca and Serrano 2007; Weber and Matthews 2008; Wood and Garnett 2009; Grainger and Kolstad 2010; Jones and Kammen 2011); see also the overviews provided by Kok and colleagues (2006) and Lenzen and colleagues (2006).”
Perceived fairness and public acceptability of carbon pricing: a review of the literature (2019, background): “Carbon pricing without complementary measures or particular uses of its revenues tend to be regressive (Baranzini et al., 2000; Grainger and Kolstad, 2010), notwithstanding that some research suggests that it might be progressive or neutral in certain low-and medium-income countries (Dorband et…”
Poverty and distributional effects of carbon pricing in low- and middle-income countries – A global comparative analysis (2019, unknown): “…be explained by the more carbon-intensive consumption patterns (in terms of CO2 emission per monetary unit) of poorer households (cf. Feng et al., 2010; Grainger & Kolstad, 2010; Kerkhof, Nonhebel, & Moll, 2009; Kerkhof, Moll, Drissen, & Wilting, 2008; Wier, Birr-Pedersen, Jacobsen, & Klok, 2005).”
The Impact of a Carbon Tax on Inequality (2019, background): “18 and Riddle (2007), Hassett et al. (2007), and Mathur and Morris (2014), we sort the population by consumption rather than income.”
The distributional effects of a carbon tax and its impact on fuel poverty: A microsimulation study in the French context (2019, result): “, 2007) Behavioural modelling leads to more mixed results depending on the sensitivity to energy prices of poor households relative to rich households (Grainger and Kolstad, 2010) (Beck et al.”
THE INITIAL INCIDENCE OF A CARBON TAX ACROSS INCOME GROUPS (2015, unknown): “…annual household income because poor households spend a greater fraction of their income on energy than do wealthy households.1 This result still holds but is reduced when models account for the effects of a carbon tax on prices of nonenergy goods (Hassett et al. 2009; Grainger and Kolstad 2010).”
Income inequality and carbon consumption: Evidence from Environmental Engel curves (2019, background): “It is often argued that carbon taxes will be regressive by disproportionally affecting poorer households who will be harder hit from price increases to carbon-intensive necessities such as heating fuel (e.g. Pearce, 1991; Grainger and Kolstad, 2010).”
The Valuation Relevance of Greenhouse Gas Emissions under the European Union Carbon Emissions Trading Scheme (2015, background): “…extent that consumers cannot find economically viable substitutes for fossil fuels, we argue that the negative valuation impact of carbon emissions will be mitigated by the firm’s ability to pass the compliance cost on to the ultimate customer (Fullerton & Heutel, 2007; Grainger & Kolstad, 2010).”
Distributional Impacts of Carbon Pricing: A General Equilibrium Approach with Micro-Data for Households (2011, unknown): “Grainger and Kolstad (2009) do a similar analysis as that of Hassett et al. (2009) and note that the use of household equivalence scales can exacerbate the regressivity of carbon pricing.”
Distributional effects of carbon taxation (2016, background): “The primary reason for the regressivity of carbon tax in developed countries lies in that the proportion of income in spending on fossil fuels decreases with the income levels; in other words, lower income households shoulder a higher carbon tax burden [13,53,68,69].”