The Distributional Impact of a Carbon Tax in Asia and the Pacific

June 10, 2022

Preview Citation

Format: Chicago

Cristian Alonso, and Joey Kilpatrick. The Distributional Impact of a Carbon Tax in Asia and the Pacific, (USA: International Monetary Fund, 2022) accessed December 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

While a carbon tax is widely acknowledged as an efficient policy to mitigate climate change, adoption has lagged. Part of the challenge resides in the distributional implications of a carbon tax and a belief that it tends to be regressive. Even when not regressive, poor households could be hurt by a carbon tax, particularly in countries that rely heavily on carbon-intensive energy sources. Using household surveys, we study how a carbon tax may affect households in the Asia Pacific region, the main source of CO2 emissions. We document a wide range of country-specific policies that could be implemented to compensate households, reduce inequality, and build support for adoption.

Subject: Carbon tax, Consumption, Household consumption, Income, Income inequality, National accounts, Taxes

Keywords: Asia and Pacific, Carbon pricing, Carbon pricing assessment tool, Carbon tax, Carbon tax revenue, Climate change, Compensation, Consumption, Distributional effects, Fiscal revenue, Global, Household consumption, Income, Income inequality, Inequality, Labor income, Means testing, Price of energy goods, Special administrative region

Publication Details

Pages:

50
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/116
Stock No:

WPIEA2022116
ISBN:

9798400212383
ISSN:

1018-5941

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