March 23, 2009

EU-Type Carbon Emissions Trade and the Distributional Impact of Overlapping Emissions Taxes

by Thomas Eichner and Rudiger Pethig

- The European Union fulfills its emissions reductions commitments by means of an emissions trading scheme covering some part of each member state’s economy and by national emissions control in the rest of their economies. The member states also levy energy/emissions taxes overlapping with the trading scheme. Restricting our focus on cost-effective policies, this paper investigates the distributive consequences of increasing the overlapping emissions tax that is uniform across countries.

Eichner, T. and R. Pethig (2009). "EU-Type Carbon Emissions Trade and the Distributional Impact of Overlapping Emissions Taxes." CESifo Working Paper No. 2579, March 2009.