Distributional effects of a carbon tax on car fuels in France

Benjamin Bureau (1)

1 CERNA i3 - Centre d'économie industrielle i3

This paper analyses the distributional effects of alternative scenarios of carbon taxes on car fuels using disaggregated French panel data from 2003 to 2006. It incorporates household price responsiveness that differs across income groups into a consumer surplus measure of tax burden. Carbon taxation is regressive before revenue recycling. However, taking into account the benefits from congestion reduction induced by the tax mitigates regressivity. We show also that recycling additional revenues from the carbon tax either in equal amounts to each household or according to household size makes poorest households better off.

Mots clés: A-carbon; Carbon taxation; Carbon taxes; Congestion reduction; Consumer surplus; Distributional effects; Panel data; Recycling; Traffic congestion; Taxation; Consumption behavior; Fuel; Income; Pollution tax; Price dynamics; France

Domaines: Economies et finances

Benjamin Bureau. Distributional effects of a carbon tax on car fuels in France. Energy Economics, 2011, 33 (1), pp.121-130. ⟨10.1016/j.eneco.2010.07.011⟩. ⟨hal-00530054v2⟩