Who pays a price on carbon?

Authors: Grainger, C.A. Kolstad, C.D.
Related subjects:
Downloads

We use the 2003 Consumer Expenditure Survey and emissions estimates from an input-output model to estimate the incidence of a price on carbon induced by a cap-and-trade program or carbon tax in the US context. We present results on how much difference income deciles pay for a carbon tax as well as which industries see the largest increase in costs due to a carbon tax. We illustrate the main determinant of the regressivity: consumption patterns for energy-intensive goods. We find that a policy targeting CO2 from energy consumption is more regressive than a price on all emissions. Furthermore, on a per-capita basis a carbon price is much more regressive than calculations at the household level. We discuss policy options to offset the adverse distributional effects of a carbon emissions policy.

Additional information

Author(s) Grainger, C.A. Kolstad, C.D.
Published by Environmental and Resource Economics
Report number
Document type Artikel
Number of pages 17
Full text available

Website by Webroots