Malte Preuss, Wolf Heinrich Reuter, Christoph M. Schmidt

Distributional Effects of Carbon Pricing in Germany

Section: Fiscal Policy in Action
FinanzArchiv (FA)

Volume 77 () / Issue 3, pp. 287-316 (30)
Published 18.10.2021

30,00 € including VAT
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Using detailed German survey data on the consumption expenditure of households, we look at the distributional effects of a uniform carbon price. While carbon pricing itself results in a regressive effect, various strategies for redistributing the ensuing revenues could reverse this result, generating a progressive effect. The combined effect is less progressive if the revenue is used to reduce electricity taxes – which would spur the desired electrification of the energy system – and more progressive if it is used for per capita lump-sum transfers. However, adjustments to the German income support system could even out these differences.

Malte Preuss No current data available.

Wolf Heinrich Reuter No current data available.

Christoph M. Schmidt No current data available.