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Who Bears the Economic Burdens of Environmental Regulations?

Author

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  • Don Fullerton
  • Erich Muehlegger
Abstract
A well-developed literature in public economics studies tax incidence—the ultimate distributional impacts of taxes. We draw on this literature to examine not only the distributional effects of environmental taxes or subsidies, but also the likely incidence of nontax regulations such as energy efficiency standards or other environmental mandates. We describe how the distributional effects of environmental policies can be altered by various market conditions, including limited factor mobility, trade exposure, evasion, corruption, or imperfect competition. Finally, we apply these lessons to study carbon policy around the world, as we examine the potential distributional consequences of a worldwide carbon tax on countries with different carbon intensities and different levels of per capita income.

Suggested Citation

  • Don Fullerton & Erich Muehlegger, 2019. "Who Bears the Economic Burdens of Environmental Regulations?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(1), pages 62-82.
    • Handle: RePEc:oup:renvpo:v:13:y:2019:i:1:p:62-82.
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    File URL: http://hdl.handle.net/10.1093/reep/rey023
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    3. Vollebergh, Herman, 2023. "Evaluating policy packages for a low-carbon transitions – Principles and applications," Other publications TiSEM 0a3c8aaf-2b01-4fe9-bfe7-a, Tilburg University, School of Economics and Management.
    4. Böhringer, Christoph & Peterson, Sonja & Rutherford, Thomas F. & Schneider, Jan & Winkler, Malte, 2021. "Climate policies after Paris: Pledge, trade, and recycle. Insights from the 36th Energy Modeling Forum study (EMF36)," Kiel Working Papers 2183, Kiel Institute for the World Economy (IfW Kiel).
    5. Andrea Bastianin & Elisabetta Mirto & Yan Qin & Luca Rossini, 2024. "What drives the European carbon market? Macroeconomic factors and forecasts," Papers 2402.04828, arXiv.org, revised Feb 2024.
    6. Zhang, Wei, 2021. "California's Climate Policy and the Dairy Manufacturing Industry: How Does a Federal Milk Marketing Order Matter?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 46(3), September.
    7. Jakob, Michael, 2021. "Climate policy and international trade – A critical appraisal of the literature," Energy Policy, Elsevier, vol. 156(C).
    8. Campagnolo, Lorenza & De Cian, Enrica, 2022. "Distributional consequences of climate change impacts on residential energy demand across Italian households," Energy Economics, Elsevier, vol. 110(C).
    9. Moritz A. Drupp & Ulrike Kornek & Jasper N. Meya & Lutz Sager, 2021. "Inequality and the Environment: The Economics of a Two-Headed Hydra," CESifo Working Paper Series 9447, CESifo.
    10. Mattauch, Linus & Zhao, Jiaxin, 2021. "When standards have better distributional consequences than carbon taxes," INET Oxford Working Papers 2020-25, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    11. Xiaowu Huang & Xin Zhao & Ao Jiao & Jianming Zheng, 2024. "Network Effects in Global Carbon Transfer: New Evidence from a Carbon-Connectedness Network Centered on China," Sustainability, MDPI, vol. 16(10), pages 1-32, May.
    12. De Cian, Enrica & Campagnolo, Lorenza, 2021. "Distributional Consequences of Climate Change Impacts on Energy Demand across Italian Households," RFF Working Paper Series 21-04, Resources for the Future.
    13. Böhringer, Christoph & Peterson, Sonja & Rutherford, Thomas F. & Schneider, Jan & Winkler, Malte, 2021. "Climate policies after Paris: Pledge, Trade and Recycle," Energy Economics, Elsevier, vol. 103(C).
    14. Sommer, Stephan & Mattauch, Linus & Pahle, Michael, 2022. "Supporting carbon taxes: The role of fairness," Ecological Economics, Elsevier, vol. 195(C).
    15. Pan, Xiongfeng & Wang, Mengyang & Li, Mengna, 2023. "Low-carbon policy and industrial structure upgrading: Based on the perspective of strategic interaction among local governments," Energy Policy, Elsevier, vol. 183(C).
    16. Ferran Sancho, 2021. "The mitigation potential of eco-taxation on carbon emissions: income effects under downward rigid wages," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(1), pages 93-107, January.
    17. Malerba, Daniele & Gaentzsch, Anja & Ward, Hauke, 2021. "Mitigating poverty: The patterns of multiple carbon tax and recycling regimes for Peru," Energy Policy, Elsevier, vol. 149(C).
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    19. Moz-Christofoletti, Maria Alice & Pereda, Paula Carvalho, 2021. "Winners and losers: the distributional impacts of a carbon tax in Brazil," Ecological Economics, Elsevier, vol. 183(C).
    20. Maria Alice Moz-Christofoletti & Paula Carvalho Pereda, 2021. "Winners and losers: the distributional impact of a carbon tax in Brazil," Working Papers, Department of Economics 2021_08, University of São Paulo (FEA-USP).
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