GTAP Resources: Resource Display
| GTAP Resource #7492 |
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"Minimum energy taxes for climate and clean air in the EU: Environmental and distributional impacts" by Maier, Sofia, Toon Vandyck, Mattia Ricci, Luis Rey, Marie Tamba and Fabian Wagner Abstract Real-world policy instruments are typically characterised by a myriad of out-of-scope provisions, exemptions, and rebates, which are often ignored by stylized climate policy representations in model-based research. In this paper, we take stock of these second-best features in EU energy taxes and assess the environmental and distributional impacts of the incremental changes proposed in the revision of the Energy Taxation Directive, which dictates minimum energy tax levels across EU countries. We combine an economy-wide general equilibrium model and a household-level microsimulation model to quantify the effects on emissions of greenhouse gases and air pollutants, tax revenue, poverty, and income inequality. Three scenarios consider additive reforms as they gradually stack up energy, climate, and air pollution-based components in the design of minimum energy tax rates. Our results indicate environmental co-benefits and suggest a trade-off between emissions reduction and inequality, which can be overcome through revenue recycling. The inequality-increasing price effect is partially offset by income-side impacts (before revenue recycling) but is strengthened by cross-country heterogeneity in energy use and taxation. Overall, our findings suggest that gearing the energy tax structure towards environmental sustainability can help deliver a just transition when embedded in a broader policy package. |
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- Climate change policy - Environmental policies - Sustainable development - European Union |
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If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.
Public Access  Paper (2.8 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
