Fiscal policy offers a number of levers to reduce carbon emissions. Climate change mitigation can for example be implemented through carbon taxation on the production or consumption side, or through debt-financed public investments in emission-reducing infrastructure. Yet these various instruments may differ significantly in their cost-effectiveness in reducing emissions and in their distributional impacts among households. The paper presented in this Research Seminar develops a macroeconomic heterogeneous-agent model with environmental externalities to address both of these questions. In this model, households derive utility from the consumption of carbon-intensive and clean goods, and from the environmental damages resulting from CO2 emissions. In addition, CO2 emissions affect productivity and thus relative prices. The authors use household data on the distribution carbon-intensive goods consumption to estimate preference parameters. Starting from a realistic fiscal structure, they then implement various tax reforms to analyze their effects on both CO2 emissons and consumption along the consumption distribution.
Environmental, energy, and ecological problems have grown faster than their solutions. Economists have an important role to play to address these issues by using the latest science, rigorous methods and innovative policy solutions. The SWEEEP webinar series aims to convene the academic community to contribute to the scientific, economic, and policy discourses on important environmental and energy issues.
The seminar presentations are scheduled to last 60 minutes, with questions at the end.
The European Institute on Economics and the Environment is a partnership between Resources for the Future and Foundation CMCC. EIEE’s impartial economic and environmental research aims to facilitate the transition to a sustainable, inclusive society.
Contact: Professor Massimo Tavoni
The Energy Management research team at the Grenoble Ecole de Management (GEM) combines research on economics, strategic management, technology innovation and energy policy in order to create and share knowledge that will help society move towards a low-carbon future.
Contact: Professor Sébastien Houde
The ZEW – Leibniz Centre for European Economic Research is a leading German economic policy institute and a member of the Leibniz Association. ZEW's applied research aims to study and help design well-performing markets and institutions in Europe. In particular, it seeks to understand how to create a market framework that will enable the sustainable and efficient development of European economies.
Contact: Professor Sebastian Rausch
The Centre for Energy Policy and Economics (CEPE) was established in 1999 to complement the natural science and technical-oriented disciplines at ETH Zurich, by contributing to research and teaching in energy policy and economics. Through rigorous application of modern empirical methods, the goal of CEPE is to make critical contributions to the design and evaluation of energy and climate policy instruments.
Contact: Professor Massimo Filippini
Please contact Marc Frick if you wish to participate in the online seminar.