Carbon Policy Design and Distributional Impacts: What Does the Research Tell Us?

Motu Working Paper 22-08

21 Pages Posted: 21 Sep 2023

See all articles by Lynn Riggs

Lynn Riggs

Motu Economic and Public Policy Research Trust

Date Written: August 2, 2022

Abstract

There are two main veins of literature examining the distributional effects of carbon policy: the effects on households and the effects on production sectors (i.e., employment). These literatures have generally arisen from two common arguments against carbon policies – that these polices disproportionately affect lower income households and that the overall effect on jobs and businesses will be negative. However, existing research finds that well-designed carbon policies are consistent with growth, development, and poverty reduction, and both literatures provide guidance for policy design in this regard. This paper brings together the guidance from both literatures.

Keywords: Environmental Economics, Climate Change Mitigation, Distributional Impacts of Carbon Policies

JEL Classification: J01, Q52, R11

Suggested Citation

Riggs, Lynn, Carbon Policy Design and Distributional Impacts: What Does the Research Tell Us? (August 2, 2022). Motu Working Paper 22-08, Available at SSRN: https://ssrn.com/abstract=4434491 or http://dx.doi.org/10.2139/ssrn.4434491

Lynn Riggs (Contact Author)

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

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