|Publication type:||Article in scientific journal|
|Type of review:||Peer review (publication)|
|Title:||Differentiated carbon prices and the economic cost of decarbonization|
|Published in:||Environmental and Resource Economics|
|Publisher / Ed. Institution:||Springer|
|Subjects:||Decarbonization; Differentiated carbon tax; Fiscal interaction; Heterogeneous household|
|Subject (DDC):||333: Economics of land and resources|
|Abstract:||Employing 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.|
|Fulltext version:||Published version|
|License (according to publishing contract):||Licence according to publishing contract|
|Departement:||School of Management and Law|
|Appears in collections:||Publikationen School of Management and Law|
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