Cheaper, greener and more efficient rationalising UK carbon prices Arun Advani and George Stoye
By: Advani, Arun
.
Contributor(s): Stoye, George.
Material type: 
ArticlePublisher: 2017Subject(s): POLITICA ENERGETICA | CARBON | CONTAMINACION ATMOSFERICA | REDUCCION | IMPUESTOS | PRECIOS | REINO UNIDO
In:
Fiscal Studies v. 38, n. 2, June 2017, p. 269-299Summary: Current UK energy use policies, which primarily aim to reduce carbón emissions, provide abatement incentives that vary by user and fuel, creating inefficiency. Distributional concerns are often given as a justification for thelower carbon price faced by households, but there is little rationale for carbonprices associated with the use of gas to be lower than those for electricity.We consider reforms that raise carbon prices faced by households and reduce the variation in carbon prices across gas and electricity use, improving the efficiency of emissions reduction. We show that the revenue raised from thesereforms can be recycled in a way that ameliorates some of the distributionalconcerns. Whilst such recycling is not able to protect all poorer households, existing policy also makes distributional trade-offs, but does so in an opaque and inefficient way.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| IEF | OP 1472/2017/2-2 (Browse shelf) | Available | OP 1472/2017/2-2 |
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Current UK energy use policies, which primarily aim to reduce carbón emissions, provide abatement incentives that vary by user and fuel, creating inefficiency. Distributional concerns are often given as a justification for thelower carbon price faced by households, but there is little rationale for carbonprices associated with the use of gas to be lower than those for electricity.We consider reforms that raise carbon prices faced by households and reduce the variation in carbon prices across gas and electricity use, improving the efficiency of emissions reduction. We show that the revenue raised from thesereforms can be recycled in a way that ameliorates some of the distributionalconcerns. Whilst such recycling is not able to protect all poorer households, existing policy also makes distributional trade-offs, but does so in an opaque and inefficient way.
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