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Transcript of Nicholas Bardsley: University of Reading and Walker Institute Milena Büchs & Sylke Schnepf:...
Nicholas Bardsley: University of Reading and Walker Institute
Milena Büchs & Sylke Schnepf:
University of Southampton
Can Climate Change Policies be Fair?
Can Climate Change Policies be Fair?
Outline:- regressivity challenge
- effects of redistributive CC policy by area
- implications of data problem for policy analysis
- limitations of static analysis, and of redistribution
Regressivity of Emissions Taxes
EFS/LCF + REAP + other sources 2006-2009
Assumptions:
Prices increase proportionally to CO2 emissions for each good / service;
Behaviour unchanged
02468
1012141618
1 2 3 4 5 6 7 8 9 10
mea
n %
of i
ncom
e
Decile of Equivalised Household Income
CO2 Tax (£100/t) as % of hh income
total
home energy
transport
indirect
Is Transport Different?
EFS/LCF + REAP + other sources 2006-2009
Cf. Dresner & Ekins (2004)
CO2 taxes on motor fuels not progressive
Est .48% of households in lowest income decile had a vehicle by 2009
Cf 33% in 1990s
0
0.5
1
1.5
2
2.5
1 2 3 4 5 6 7 8 9 10
mea
n %
of i
ncom
e
Decile of Equivalised Household Income
Transport: £100/t CO2 Taxes as % of income
total
motor fuels
public transport
air travel
“Rebate” Options
• Reduced fossil fuel use implies an increased scarcity rent - an unearned income transfer
• To avoid regressivity and fuel poverty, the rent can be: – predistributed (tradable permits) OR– redistributed (tax rebates)– Examples:
• Cap and Share, Cap and Dividend (Douthwaite, Barnes)• Personal Carbon Trading (Flemming)• Tax and Dividend (Hansen)
• Assuming implementation issues are soluble (Sorrell 2007, AEA 2008) …
“Rebate” Schemes by Emissions Area
EFS/LCF + REAP + other sources 2006-2009
Annual rebates of mean per adult revenue to each adult in a HH
Net Financial Burden of £100/t CO2 Tax and Rebate
-10
-8
-6
-4
-2
0
2
4
1 2 3 4 5 6 7 8 9 10
Decile of Equivalised Household Income
mea
n %
of
inco
me
total
home energy
transport
indirect
Assumptions:
No behaviour change
Border tarrifs or general adoption
Non-EUETS= transport + indirect - aviation
Assumptions:
No behaviour change
Border tarrifs or general adoption
Interim conclusion: fair climate change policy is possible
-2
0
2
4
6
8
1 2 3 4 5 6 7 8 9 10
mea
n ga
in a
s %
of
inco
me
Decile of Equivalised Household Income
Net Financial Gain from £100/t CO2 Cap/Tax & 'Rebate' scheme
transport
Non-EUETS
Annual rebates of mean per adult revenue to each adult in a HH
Households below the Poverty Line
• Motor Fuels £100/tCO2 Tax Rebated0
10
20
30
40
Pe
rcen
t
-.3 -.2 -.1 0 .1gains_mf_prop
17% lose 83% gain
Households with <60% of Median Income
Low-income, rural motorists
Mean CO2 tax = 3% of income
Mean net burden = 0.3% of income
01
02
03
0
Pe
rcen
t
-.1 0 .1 .2 .3netadonly_mf_prop
01
02
03
04
0P
erc
ent
0 .1 .2 .3tax_mf_pro100
£100/t CO2 Tax motor fuels
£100/t CO2 Tax motor fuels + rebate
Mean for non-EUETS emissions scheme = -1.2% of income
• National Travel Survey contains:– 1 week fuel purchase diary (litres and £)– Interview mileage question (last year’s mileage)
• It is therefore potentially useful for exploring infrequency of purchase issues
• In a world in which low income drivers all had below average mileage, range extension would:a) exaggerate numbers of low-income losers, from rebated CO2 tax
b) understate numbers of low-income losers, from rebated CO2 tax
Data Problem: Range Extension from Infrequency of Purchase
?
NTS Diary vs Interview: Motor Fuels Policy
-15
-10
-5
0
5
10
15
20
25
1 2 3 4 5
% o
f Qui
ntile
Quintile of Gross HH income
Motor Fuel Policy: Erroneous Winners & Losers
err. losers
err. winners
difference
Higher income hhs more likely to have a vehicle; range extension concentrates there
2002-2008
LCF vs NTS: Motor Fuels Policy
Note: typical effects of an aviation policy might also be affected for this reason with LCF data: we don't observe the rate of flying with a 1-year window.
-20
24
6
1 2 3 4 5
excludes outside values
Est. Financial Effects as Multiple of Permit Values, <3 adults HHs
LCF_diary NTS_interview
Q1, % Q5, %
win lose win lose
NTS 87 13 35 65
LCF 83 17 42 58
2006-2008
Differences significant at 1% level
Limitations of "Static Microsimulation"
• Assumes behaviour does not change• But the point of CC Mitigation Policy is changed
behaviour• "SM yields estimates of “initial effects” of policies only"
– Dynamic inferences, therefore, are not licensed
• What else is there ..? – Economists’ (computable) ‘general equilibrium’ models
• Misleading assumptions, poor track record, resource requirements
– hybrid economics / engineering models e.g. E3ME• assumption-heavy, significant resource requirements …
Source: Mario Giampietro and Kozo Mayumi: “The Biofuel Delusion” (2009)
“Trophic Methods” in Ecological Economics
Liebig’s “Law of the Minimum”
industrial / agricultural; degrowth / growth; sharing / individualist; money system
Conclusions• Progressive Climate Change policy is possible• Infrequency of purchase may obscure progressivity of
rebate schemes, in survey data• But redistributive measures cannot offset reduced fossil
energy throughput. Effects of that reduction may not be explorable at high resolution
• Climate change social policy agenda needs to join with debate over far-reaching transformation (e.g. ‘degrowth’ movement)
• That is a political debate over how to live & organise society across the board