Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259736 
Authors: 
Year of Publication: 
2019
Citation: 
[Journal:] Swiss Journal of Economics and Statistics [ISSN:] 2235-6282 [Volume:] 155 [Issue:] 11 [Publisher:] Springer [Place:] Heidelberg [Year:] 2019 [Pages:] 1-28
Publisher: 
Springer, Heidelberg
Abstract: 
Swiss targets for climate policy require significant reductions of emissions by 2050. While such reductions can be achieved in a cost-efficient manner by employing taxes on greenhouse gas emissions, such taxes tend to lead to a regressive distribution of policy cost among households. To counteract such a regressive outcome, tax revenue may be recycled in a progressive way. This paper uses a computable general equilibrium model coupled with a microsimulation of household income and expenditure to examine the policy cost of different carbon tax policies and their distribution across households. I find that in the absence of revenue recycling, emission taxation leads to a regressive distribution of policy cost. I analyze different revenue recycling schemes (per-capita lump-sum transfers, reductions in labor taxation, and reductions in VAT taxation of necessary commodities) and their ability to avoid regressive outcomes.
Subjects: 
Cost-effectiveness
Computable general equilibrium
Microsimulation
Climate policy
Distributional impacts
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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