Green tax reform for a just climate transition (GRETA)

Descripción del proyecto

Una mirada más atenta al desigual impacto social del desafío climático

A medida que la Unión Europea avanza audazmente hacia ambiciosos objetivos climáticos, resulta cada vez más importante tener en cuenta las profundas y a menudo ignoradas repercusiones sociales de estas políticas climáticas. El reto consiste en mitigar los efectos adversos sin exacerbar la desigualdad, un importante problema de nuestro tiempo. En este sentido, el equipo del proyecto GRETA, financiado por el Consejo Europeo de Investigación, pretende hacer avanzar las políticas climáticas introduciendo una metodología integrada que no solo pretende cumplir los objetivos medioambientales, sino que también se esfuerza por lograr una distribución más equitativa de las cargas y beneficios asociados entre los diversos segmentos de la sociedad. Unas políticas fiscales bien diseñadas pueden mitigar los efectos distributivos adversos en los mercados de consumo y de trabajo de una forma que se considere justa, incentivando a su vez la reducción de emisiones y la oferta de mano de obra.

Objetivo

The European Union’s ambitious climate policies will have wide-ranging distributional impacts in societies. Yet, it is poorly understood how to mitigate the adverse impacts and how compensation mechanisms can be designed to allocate funds to those most in need.

GRETA introduces an integrated approach for climate policies and inequality, and will increase our understanding on how to reach climate targets equitably.

In the theoretical part, we characterize a green tax reform that creates sufficient incentives to cut emissions, generates public revenue for the green transition, and ensures that costs are fairly distributed across the society. Individuals hold private information about their productivity and abatement costs. In this setting, income taxation and carbon pricing are not separable and, strikingly, effective carbon prices should vary by income-level. The theory shows that the optimal tax design depends on a limited set of sufficient statistics, including: (1) carbon price incidence per income group, (2) emission semi-elasticity per income group and (3) individuals’ perception of within- and across-income inequality.

In the empirical part, we quantify these sufficient statistics (1)-(3) using price variation created by the Energy Crisis of 2022 and a rich administrative data covering all Finnish firms and individuals. First, we estimate the within- and across-income inequalities created by the sudden rise in electricity prices and, using plausibly exogenous ending dates of fixed-term contract, estimate the individual-level emission semi-elasticities. Second, we study how the energy price spikes contribute to inequality though their different impacts on firm owners and workers, where our identification is based on a shift-share instrument approach. Third, we study the fairness perception by a large-scale survey where responses are linked to the administrative data. These empirical findings allow us to quantify the optimal tax design numerically.