Cost distribution and equity of climate policy in Switzerland
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Date
2019
Publication Type
Journal Article
ETH Bibliography
yes
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Abstract
Swiss targets for climate policy require significant reductions of emissions by 2050. While such reductions can be achieved in a cost-efficient manner by employing taxes on greenhouse gas emissions, such taxes tend to lead to a regressive distribution of policy cost among households. To counteract such a regressive outcome, tax revenue may be recycled in a progressive way. This paper uses a computable general equilibrium model coupled with a microsimulation of household income and expenditure to examine the policy cost of different carbon tax policies and their distribution across households. I find that in the absence of revenue recycling, emission taxation leads to a regressive distribution of policy cost. I analyze different revenue recycling schemes (per-capita lump-sum transfers, reductions in labor taxation, and reductions in VAT taxation of necessary commodities) and their ability to avoid regressive outcomes.
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Publication status
published
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Journal / series
Volume
155 (1)
Pages / Article No.
11
Publisher
SpringerOpen
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Edition / version
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Date collected
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Subject
Cost-effectiveness; Computable general equilibrium; Microsimulation; Climate policy; Distributional
Organisational unit
03981 - Rausch, Sebastian (ehemalig) / Rausch, Sebastian (former)