Distributional effects of a carbon tax on car fuels in France

Abstract: This paper analyses the distributional effects of alternative scenarios of carbon taxes on car fuels using disaggregated French panel data from 2003 to 2006. It incorporates household price responsiveness that differs across income groups into a consumer surplus measure of tax burden. Carbon taxation is regressive before revenue recycling. However, taking into account the benefits from congestion reduction induced by the tax mitigates regressivity. We show also that recycling additional revenues from the carbon tax either in equal amounts to each household or according to household size makes poorest households better off.

Keywords: A-carbon; Carbon taxation; Carbon taxes; Congestion reduction; Consumer surplus; Distributional effects; Panel data; Recycling; Traffic congestion; Taxation; Consumption behavior; Fuel; Income; Pollution tax; Price dynamics; France (search for similar items in EconPapers)
Date: 2011
Note: View the original document on HAL open archive server: https://minesparis-psl.hal.science/hal-00530054v2
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Published in Energy Economics, 2011, 33 (1), pp.121-130. ⟨10.1016/j.eneco.2010.07.011⟩

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Journal Article: Distributional effects of a carbon tax on car fuels in France (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00530054

DOI: 10.1016/j.eneco.2010.07.011

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