Context: Environmental policy is shifting from setting targets to influencing millions of everyday decisions made by households and firms. Yet people and companies start from very different positions: some live where public transport is scarce, some already own clean technologies, some control hydro plants, while others rely on diesel trucks. These “hand-of-the-past” differences shape who can adapt quickly, who pays more, and who ends up better off.
Scientific gap: Existing studies seldom follow choices, wealth effects, and market power over time or combine them in an empirical setting, leaving policymakers without evidence on how today’s rules affect tomorrow’s inequality.
Mission: DEEP – Distributional Effects of Environmental Policy asks: How do existing differences between individuals, households, and firms interact with environmental policies to shape choices and, ultimately, the distribution of costs, benefits, and welfare?
Approach: We are building an economy-wide evidence base that links thirty years of administrative vehicle, energy, and socioeconomic data with detailed policy timelines. Dynamic decision models will then trace adjustment paths, wealth effects, and market-power channels.
Objectives:
1. Electrification of transport. Quantify how location, income, and vehicle portfolios govern electric-car take-up, public-transport substitution, and second-hand-market prices.
2. Renewable energy production and electricity use. Measure how pre-existing generation assets and firm characteristics drive responses to policies that influence investment in renewable energy.
Expected impact: By revealing where policy effectiveness trades off against equity, DEEP will help design climate instruments that accelerate decarbonisation without exacerbating disparities and market power.
