Unequal emissions – unequal policy impacts: how do different areas of CO2 emissions compare?

Abstract

Distributional implications of climate change mitigation policies relate to important questions about fairness: which groups bear the highest burdens – or receive the greatest assistance – from these policies and how does this relate to their contribution to emissions? It is already well established that general carbon taxes are likely to have regressive impacts – placing higher relative burdens on poorer than on richer households – and it is often argued that these effects can be reversed, for example through rebate schemes or equal per capita carbon allowances. But does this hold equally for home energy, transport, indirect emissions? And which role do household characteristics other than income and household size play for the distribution of benefits and burdens from mitigation policies? This chapter provides an overview of mitigation policies and examines potential distributional implications across different emission domains. The analysis is based on a dataset of household CO2 emissions that the authors derive from UK expenditure data. It shows that mitigation policies that only target home energy emissions are least equitable from a distributional point of view, not only in terms of differences among income groups but also in relation to other household characteristics.

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