Efficiency and equity aspects of energy taxation

Author

Toon Vandyck

Publication Date

Jul 2013

Abstract

We analyse the distributional effects of increased oil excises in Belgium by combining aComputable General Equilibrium (CGE) model with the EUROMOD microsimulation frameworkthat exploits the rich detail of household-level data. The link between the CGE model and themicro level is top-down, feeding changes in commodity prices, factor returns and employment bysector into a non-behavioural microsimulation. The results suggest that policymakers face anequity-efficiency trade-off driven by the choice of revenue recycling options. Distributional effectsof the environmental tax reform appear to depend strongly on changes in factor prices and welfarepayments.

Publication type

EUROMOD Working Paper Series

Series Number

EM12/13

Download paper

Cid:521791