1. Distributional effects of carbon pricing: An analysis of income-based versus expenditure-based approaches.
- Author
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Shei, Cheng-Hsiang, Liu, John Chung-En, and Hsieh, I-Yun Lisa
- Subjects
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CARBON analysis , *CARBON pricing , *INCOME , *RENEWABLE energy transition (Government policy) , *CARBON emissions , *ECONOMIC status - Abstract
As nations strive for a just transition to net-zero carbon emissions, the equitable distribution of carbon pricing's impact is of significant importance. Carbon pricing, a strategy recognized for its potentially regressive nature, tends to disproportionately burden lower-income households compared to wealthier counterparts. This study examined how the choice of income or expenditure as metrics for assessing carbon burdens and ranking household economic status influences these distributional effects. Our research, employing input-output models and the Taiwan 2021 Survey of Family Income and Expenditure, compared these two metrics. The findings revealed that income-based assessments would amplify the regressive impact of carbon pricing. Conversely, using expenditure as the base for carbon burden exhibited markedly reduced regressive effects. Moreover, the study highlighted the role of employment structures in determining the equity of ranking households by income or expenditure. The stability of distributional outcomes, when employing expenditure as the assessment base, suggested its superiority as a metric unaffected by ranking methodologies. Additionally, our analysis indicated that including gasoline in carbon pricing policies could counteract the regressive nature of such policies. This aligned with a just transition by potentially distributing the burden more evenly across socio-economic groups. By providing insights into the distributional effects of carbon pricing, this study contributed to the global pursuit of net-zero emissions while adhering to the principles of social equity and justice. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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