How to make a carbon tax reform progressive: The role of subsistence consumption

Klenert, David; Mattauch, Linus

doi:10.1016/j.econlet.2015.11.019

Cited by 97 publications

(45 citation statements)

References 17 publications

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“…Second, and in line with Bovenberg (1999), it may have been concerned with the distributional consequences of adopting the most efficient revenue-recycling options. Ensuring a subsistence level of polluting consumption, Klenert and Mattauch (2016) find that a well-designed policy can achieve the double dividend and still avoid the regressivity of a carbon tax, the main driver of which is a price increase of carbon-intensive goods such as electricity, heating and food, for which subsistence levels exist (Grainger and Kolstad, 2010).…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

A new carbon tax in Portugal: A missed opportunity to achieve the triple dividend?

Pereira

Rodrigues

2016

Energy Policy

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In 2014, the Portuguese government appointed a Commission for Environmental Tax Reform that formulated a carbon-tax proposal designed to achieve three dividends: to help Portugal meet the European Union's target for emissions reductions by 2030, to boost long-term employment and GDP above their pre-carbon-tax levels, and to strengthen public finances by lowering public indebtedness. A key feature of this proposal was a judicious set of mixed strategies to recycle all carbon-tax revenues back into the economy. In this note, we show how the carbon tax that the Portuguese Parliament eventually approved deviated from such guidelines, and ultimately failed to achieve the triple dividend. We argue that authorities need to quickly amend the existing legislation to avoid this misguided attempt turning into a missedopportunityto improve environmental, macroeconomic, and fiscal outcomes.

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Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

A new carbon tax in Portugal: A missed opportunity to achieve the triple dividend?

Pereira

Rodrigues

2016

Energy Policy

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“…However, middle and high-income countries often have the institutional capacities to overcome these adverse effects by pursuing compensation policies. Transfers on an equal per capita basis are highly benefi cial for poor households (Klenert and Mattauch, 2016), but targeted transfers leave more revenue for other purposes.…”

Section: Distribution Of Costsmentioning

confidence: 99%

The Emissions Gap Report 2014

2014

The Emissions Gap Report

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The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of United Nations Environment Programme concerning the legal status of any country, territory or city or its authorities, or concerning the delimitation of its frontiers or boundaries. For general guidance on matters relating to the use of maps in publications please go to http://www.un.org/Depts/Cartographic/english/htmain.htm Disclaimers Mention of a commercial company or product in this document does not imply endorsement by UN Environment or the authors. The use of information from this document for publicity or advertising is not permitted. Trademark names and symbols are used in an editorial fashion with no intention on infringement of trademark or copyright laws. The views expressed in this publication are those of the authors and do not necessarily reflect the views of the UN Environment. We regret any errors or omissions that may have been unwittingly made.

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“…Ciaschini et al () concluded that returning the green tax to reduce income taxes allows for the achievement of the double dividend in Italy. However, Klenert and Mattauch () found that when the tax revenue is returned to households via linear income tax cuts, or in proportion to household productivity, the overall effect of the tax reform is regressive. While lump‐sum transfers could result in progressive effects.…”

Section: Introductionmentioning

confidence: 99%

Impacts of Potential China's Environmental Protection Tax Reforms on Provincial Air Pollution Emissions and Economy

Liu

Yang

et al. 2020

Earth's Future

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China's environmental protection tax (EPT) has been implemented since the beginning of 2018 to control environmental issues (e.g., air pollution). The current EPT law indicates that tax revenues are given to provincial governments without return. However, tax revenue redistribution is the key to achieving a so-called "double dividend"; that is, an environmental tax could benefit both the environment and economic efficiency. Based on our previous analysis of the effectiveness of the current EPT, we further explore whether the double dividend could be achieved under different tax reforms based on the multiregion and multisectoral computable general equilibrium model. We find that recycling the EPT revenue to reduce household income tax (EPT_Int) is an efficient way to achieve the double dividend, and there is no double dividend if the EPT revenue is compensated by reducing enterprise income tax (EPT_Ent) or by investing in solar power (EPT_Sol). Combining EPT_Int and EPT_Sol could be a better approach if more air pollution emissions reductions are required to achieve the national reduction targets. At the provincial level, recycling the EPT revenues to reduce household income tax could offset the negative effect of environmental tax on the economy and achieve the double dividend in all provinces, especially the provinces with higher emission intensity, such as Shanxi, Hebei, Inner Mongolia, and Guizhou Provinces. This result shows that provinces with high emission intensity may further reduce air pollutant emissions during the post-EPT era.

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How to make a carbon tax reform progressive: The role of subsistence consumption

Cited by 97 publications

References 17 publications

A new carbon tax in Portugal: A missed opportunity to achieve the triple dividend?

A new carbon tax in Portugal: A missed opportunity to achieve the triple dividend?

The Emissions Gap Report 2014

Impacts of Potential China's Environmental Protection Tax Reforms on Provincial Air Pollution Emissions and Economy

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