Publication type: Article in scientific journal
Type of review: Peer review (publication)
Title: How robust is the uniform emissions pricing rule to social equity concerns?
Authors: Abrell, Jan
Rausch, Sebastian
Schwarz, Giacomo A.
DOI: 10.1016/j.jeem.2017.09.008
Published in: Journal of Environmental Economics and Management
Volume(Issue): 2018
Issue: 92
Pages: 783
Pages to: 814
Issue Date: 2017
Publisher / Ed. Institution: Elsevier
ISSN: 0095-0696
Language: English
Subjects: Differentiated environmental tax; Carbon pricing; Climate policy; Heterogeneous household
Subject (DDC): 363: Environmental and security problems
Abstract: This paper examines pollution tax differentiation across industries in light of social equity concerns using theoretical and numerical general equilibrium analyses in an optimal tax framework. We characterize the drivers for non-uniform optimal taxes stemming from the interaction of household heterogeneity with social preferences. Quantitatively assessing the case of price-based CO2 emissions control in the U.S. economy, we find that uniform emissions pricing is approximately optimal when social concerns are defined over inequity induced by the environmental tax. The deviation from uniform emissions pricing, however, becomes non-negligible when pollution tax rebates deviate much from optimal transfer schemes or when social concerns are defined over both policy-induced impacts and inequity unrelated to environmental policy. Our results are robust to a number of model extensions including the stringency of the environmental target, downstream vs. upstream taxation, pre-existing distortionary taxes, and parametric uncertainty in firms’ and households’ equilibrium tax responses.
URI: https://digitalcollection.zhaw.ch/handle/11475/16536
Fulltext version: Published version
License (according to publishing contract): Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Center for Energy and Environment (CEE)
Appears in collections:Publikationen School of Management and Law

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