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The Distributional Impact of a Carbon Tax in Asia and the Pacific
Author:
Cristian Alonso
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and
Mr. Joey Kilpatrick
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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 116
Language:
English
Publication Date:
10 Jun 2022
DOI:
https://doi.org/10.5089/9798400212383.001
ISBN:
9798400212383
ISSN:
1018-5941
Pages:
50
Keywords:
Carbon pricing; Climate change; Compensation; Distributional effects; Inequality; means testing; Labor income; fiscal revenue; price of energy goods; carbon tax revenue; special administrative region; carbon pricing assessment tool; Carbon tax; Income; Household consumption; Consumption; Income inequality; Asia and Pacific; Global
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While a carbon tax is widely acknowledged as an efficient policy to mitigate climate change, adoption has lagged. Part of the challenge resides in the distributional implications of a carbon tax and a belief that it tends to be regressive. Even when not regressive, poor households could be hurt by a carbon tax, particularly in countries that rely heavily on carbon-intensive energy sources. Using household surveys, we study how a carbon tax may affect households in the Asia Pacific region, the main source of CO2 emissions. We document a wide range of country-specific policies that could be implemented to compensate households, reduce inequality, and build support for adoption.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2022: Issue 116