Differentiated Carbon Prices and the Economic Cost of Decarbonization
mploying a numerical general equilibrium model with multiple fuels, end-use sectors, heterogeneous households, and transport externalities, this paper examines three motives for differentiated carbon pricing in the context of Swiss climate policy: fiscal interactions with the existing tax code, non-...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
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Springer-Verlag
2018
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| Online Access: | http://hdl.handle.net/1721.1/116365 |
| _version_ | 1811075168435437568 |
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| author | Landis, Florian Rausch, Sebastian Kosch, Mirjam |
| author2 | MIT Energy Initiative |
| author_facet | MIT Energy Initiative Landis, Florian Rausch, Sebastian Kosch, Mirjam |
| author_sort | Landis, Florian |
| collection | MIT |
| description | mploying a numerical general equilibrium model with multiple fuels, end-use sectors, heterogeneous households, and transport externalities, this paper examines three motives for differentiated carbon pricing in the context of Swiss climate policy: fiscal interactions with the existing tax code, non-CO₂ related transport externalities, and social equity concerns. Interaction effects with mineral oil taxes reduce carbon taxes on motor fuels and transport externalities increase them. We show that the cost-effective overall carbon tax on motor fuels should be lower than the one on thermal fuels. This is found in spite of the fact that pre-existing taxes on motor fuels are well below our estimate of the transport externality per unit of transport fuel consumption. Differentiating taxes in favor of motor fuels yields only slightly more equitable incidence effects among households, suggesting that equity considerations play a minor role when designing differentiated carbon pricing policies. |
| first_indexed | 2024-09-23T10:01:54Z |
| format | Article |
| id | mit-1721.1/116365 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T10:01:54Z |
| publishDate | 2018 |
| publisher | Springer-Verlag |
| record_format | dspace |
| spelling | mit-1721.1/1163652022-09-30T18:27:46Z Differentiated Carbon Prices and the Economic Cost of Decarbonization Landis, Florian Rausch, Sebastian Kosch, Mirjam MIT Energy Initiative Rausch, Sebastian mploying a numerical general equilibrium model with multiple fuels, end-use sectors, heterogeneous households, and transport externalities, this paper examines three motives for differentiated carbon pricing in the context of Swiss climate policy: fiscal interactions with the existing tax code, non-CO₂ related transport externalities, and social equity concerns. Interaction effects with mineral oil taxes reduce carbon taxes on motor fuels and transport externalities increase them. We show that the cost-effective overall carbon tax on motor fuels should be lower than the one on thermal fuels. This is found in spite of the fact that pre-existing taxes on motor fuels are well below our estimate of the transport externality per unit of transport fuel consumption. Differentiating taxes in favor of motor fuels yields only slightly more equitable incidence effects among households, suggesting that equity considerations play a minor role when designing differentiated carbon pricing policies. 2018-06-18T17:41:02Z 2018-06-18T17:41:02Z 2017-03 2017-03 2018-06-05T04:24:10Z Article http://purl.org/eprint/type/JournalArticle 0924-6460 1573-1502 http://hdl.handle.net/1721.1/116365 Landis, Florian, Sebastian Rausch, and Mirjam Kosch. “Differentiated Carbon Prices and the Economic Cost of Decarbonization.” Environmental and Resource Economics 70, no. 2 (March 24, 2017): 483–516. en https://doi.org/10.1007/s10640-017-0130-y Environmental and Resource Economics Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. Springer Science+Business Media Dordrecht application/pdf Springer-Verlag Springer Netherlands |
| spellingShingle | Landis, Florian Rausch, Sebastian Kosch, Mirjam Differentiated Carbon Prices and the Economic Cost of Decarbonization |
| title | Differentiated Carbon Prices and the Economic Cost of Decarbonization |
| title_full | Differentiated Carbon Prices and the Economic Cost of Decarbonization |
| title_fullStr | Differentiated Carbon Prices and the Economic Cost of Decarbonization |
| title_full_unstemmed | Differentiated Carbon Prices and the Economic Cost of Decarbonization |
| title_short | Differentiated Carbon Prices and the Economic Cost of Decarbonization |
| title_sort | differentiated carbon prices and the economic cost of decarbonization |
| url | http://hdl.handle.net/1721.1/116365 |
| work_keys_str_mv | AT landisflorian differentiatedcarbonpricesandtheeconomiccostofdecarbonization AT rauschsebastian differentiatedcarbonpricesandtheeconomiccostofdecarbonization AT koschmirjam differentiatedcarbonpricesandtheeconomiccostofdecarbonization |