{"id":269273,"date":"2024-07-16T11:37:44","date_gmt":"2024-07-16T09:37:44","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/269273\/"},"modified":"2024-07-16T14:37:27","modified_gmt":"2024-07-16T12:37:27","slug":"investigating-equity-and-efficiency-in-carbon-pricing-with-revenue-recycling-a-combined-macro-and-micro-modelling-approach","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/269273\/","title":{"rendered":"Investigating Equity and Efficiency in Carbon Pricing with Revenue Recycling: A Combined Macro- and Micro-modelling Approach"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-269273","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"While the potential of carbon pricing to curb CO2 emissions is widely acknowledged, the instrument keeps being disputed due to its potential regressivity and the burden it places on low-income households. Recently also the issue of horizontal inequalities has gained in importance in political and scientific discussions, especially with respect to regional differences in the impacts of carbon pricing. We link the macroeconomic model DYNK with the microsimulation model EASI_AT to analyse the effects of carbon pricing under various revenue recycling options, focusing on the regional dimension of the distributional effects of carbon pricing policies. This approach allows combining the detailed household representation of the microsimulation approach with information on the macroeconomic feedback effects. Our results confirm that carbon pricing, without revenue recycling, generally places a higher burden on households living in peripheral regions due to their higher dependence on motorised individual transport, larger dwellings, and a higher prevalence of oil heating systems. However, lump-sum payments targeted at low incomes significantly improve the situation for peripheral regions (the cost of living decreases for 94 percent of households in the lowest income quintile). Ultimately, targeted support (e.g., subsidies for exchanging heating systems) is required to alleviate the burden for low-income households.","onlinedate":"2024-07-16 00:00:00","lang":"English","publication_series":"","publication_date":"20240712","publication_date_year":"","publication_date_full":true,"publication_num_pages":"35","keywords":"[]","jelcodes":"[\"Q54\",\"Q58\",\"H23\"]","related_publications":"[]","pdf":269287,"zip":null,"link":"","monthly_report":false,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"682","journal":"WIFO Working Papers","publisher":"","invisible":false,"external":false,"embargo_date":"2024-07-16 00:00:00","types":[44410],"research_groups":[3655],"collaboration":"","persons":[3652,218787,13005,269224,3743,14273],"persons_data":"[{\"personId\":3652,\"personName\":\"Claudia Kettner\",\"organisationNames\":[]},{\"personId\":218787,\"personName\":\"Thomas Leoni\",\"organisationNames\":[\"FH Wiener Neustadt\"]},{\"personId\":13005,\"personName\":\"Judith K\u00f6berl\",\"organisationNames\":[\"Joanneum Research\"]},{\"personId\":269224,\"personName\":\"Dominik Kortschak\",\"organisationNames\":[\"Joanneum Research\"]},{\"personId\":3743,\"personName\":\"Mark Sommer\",\"organisationNames\":[]},{\"personId\":14273,\"personName\":\"Veronika Kulmer\",\"organisationNames\":[\"University of Graz\"]}]","clients":[10642],"subclients":[],"partners":[8870,8891,8893,8896],"topics":[40961],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","citations":"{\"apa\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_apa rendering_contributiontoperiodical rendering_apa rendering_contributiontoperiodical_apa\\\"><span>Kettner, C.<\\\/span>, Leoni, T., K\u00f6berl, J., Kortschak, D.<span>, Sommer, M.<\\\/span>, &amp; Kulmer, V. (2024). <span>Investigating Equity and Efficiency in Carbon Pricing with Revenue Recycling: A Combined Macro- and Micro-modelling Approach<\\\/span>. <span><em>WIFO Working Papers<\\\/em><\\\/span>, (682).<\\\/div>\",\"vancouver\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_vancouver rendering_contributiontoperiodical rendering_vancouver rendering_contributiontoperiodical_vancouver\\\"><span>Kettner C<\\\/span>, Leoni T, K\u00f6berl J, Kortschak D<span>, Sommer M<\\\/span>, Kulmer V. <span class=\\\"title\\\"><span>Investigating Equity and Efficiency in Carbon Pricing with Revenue Recycling: A Combined Macro- and Micro-modelling Approach<\\\/span><\\\/span>. <span>WIFO Working Papers<\\\/span>. 2024 Jul 12;(682).<\\\/div>\",\"bibtex\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_bibtex rendering_contributiontoperiodical rendering_bibtex rendering_contributiontoperiodical_bibtex\\\"><div>@misc{b11bc9c6860f4a928bc7b62c58388213,<\\\/div><div>  title    = \\\"Investigating Equity and Efficiency in Carbon Pricing with Revenue Recycling: A Combined Macro- and Micro-modelling Approach\\\",<\\\/div><div>  abstract = \\\"While the potential of carbon pricing to curb CO2 emissions is widely acknowledged, the instrument keeps being disputed due to its potential regressivity and the burden it places on low-income households. Recently also the issue of horizontal inequalities has gained in importance in political and scientific discussions, especially with respect to regional differences in the impacts of carbon pricing. We link the macroeconomic model DYNK with the microsimulation model EASI\\\\_AT to analyse the effects of carbon pricing under various revenue recycling options, focusing on the regional dimension of the distributional effects of carbon pricing policies. This approach allows combining the detailed household representation of the microsimulation approach with information on the macroeconomic feedback effects. Our results confirm that carbon pricing, without revenue recycling, generally places a higher burden on households living in peripheral regions due to their higher dependence on motorised individual transport, larger dwellings, and a higher prevalence of oil heating systems. However, lump-sum payments targeted at low incomes significantly improve the situation for peripheral regions (the cost of living decreases for 94 percent of households in the lowest income quintile). Ultimately, targeted support (e.g., subsidies for exchanging heating systems) is required to alleviate the burden for low-income households.\\\",<\\\/div><div>  author   = \\\"Claudia Kettner and Thomas Leoni and Judith K{\\\\\\\"o}berl and Dominik Kortschak and Mark Sommer and Veronika Kulmer\\\",<\\\/div><div>  year     = \\\"2024\\\",<\\\/div><div>  month    = jul,<\\\/div><div>  day      = \\\"12\\\",<\\\/div><div>  language = \\\"English\\\",<\\\/div><div>  journal  = \\\"WIFO Working Papers\\\",<\\\/div><p>}<\\\/p><\\\/div>\",\"ris\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_ris rendering_contributiontoperiodical rendering_ris rendering_contributiontoperiodical_ris\\\"><p>TY  - GEN<\\\/p><p>T1  - Investigating Equity and Efficiency in Carbon Pricing with Revenue Recycling: A Combined Macro- and Micro-modelling Approach<\\\/p><p>AU  - Kettner, Claudia<\\\/p><p>AU  - Leoni, Thomas<\\\/p><p>AU  - K\u00f6berl, Judith<\\\/p><p>AU  - Kortschak, Dominik<\\\/p><p>AU  - Sommer, Mark<\\\/p><p>AU  - Kulmer, Veronika<\\\/p><p>PY  - 2024\\\/7\\\/12<\\\/p><p>Y1  - 2024\\\/7\\\/12<\\\/p><p>N2  - While the potential of carbon pricing to curb CO2 emissions is widely acknowledged, the instrument keeps being disputed due to its potential regressivity and the burden it places on low-income households. Recently also the issue of horizontal inequalities has gained in importance in political and scientific discussions, especially with respect to regional differences in the impacts of carbon pricing. We link the macroeconomic model DYNK with the microsimulation model EASI_AT to analyse the effects of carbon pricing under various revenue recycling options, focusing on the regional dimension of the distributional effects of carbon pricing policies. This approach allows combining the detailed household representation of the microsimulation approach with information on the macroeconomic feedback effects. Our results confirm that carbon pricing, without revenue recycling, generally places a higher burden on households living in peripheral regions due to their higher dependence on motorised individual transport, larger dwellings, and a higher prevalence of oil heating systems. However, lump-sum payments targeted at low incomes significantly improve the situation for peripheral regions (the cost of living decreases for 94 percent of households in the lowest income quintile). Ultimately, targeted support (e.g., subsidies for exchanging heating systems) is required to alleviate the burden for low-income households.<\\\/p><p>AB  - While the potential of carbon pricing to curb CO2 emissions is widely acknowledged, the instrument keeps being disputed due to its potential regressivity and the burden it places on low-income households. Recently also the issue of horizontal inequalities has gained in importance in political and scientific discussions, especially with respect to regional differences in the impacts of carbon pricing. We link the macroeconomic model DYNK with the microsimulation model EASI_AT to analyse the effects of carbon pricing under various revenue recycling options, focusing on the regional dimension of the distributional effects of carbon pricing policies. This approach allows combining the detailed household representation of the microsimulation approach with information on the macroeconomic feedback effects. Our results confirm that carbon pricing, without revenue recycling, generally places a higher burden on households living in peripheral regions due to their higher dependence on motorised individual transport, larger dwellings, and a higher prevalence of oil heating systems. However, lump-sum payments targeted at low incomes significantly improve the situation for peripheral regions (the cost of living decreases for 94 percent of households in the lowest income quintile). Ultimately, targeted support (e.g., subsidies for exchanging heating systems) is required to alleviate the burden for low-income households.<\\\/p><p>M3  - WIFO series<\\\/p><p>JO  - WIFO Working Papers<\\\/p><p>JF  - WIFO Working Papers<\\\/p><p>ER  - <\\\/p><\\\/div>\"}","scientific_assistance":"[]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Investigating Equity and Efficiency in Carbon Pricing with Revenue Recycling: A Combined Macro- and Micro-modelling Approach - WIFO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wifo.ac.at\/en\/publication\/269273\/\" 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