Thread by @eravigne1

🚨 New Paper! 🚨 I'm so excited that the 1st paper of my PhD is out in Ecological Economics 🥳
doi.org/10.1016/j.ecol…
#EconTwitter

Here's a 🧵 on the distributive impacts of a full policy package including carbon taxes and subsidies for EV and thermal renovation 1/14

Lots of papers studying distributive impacts of env. policies conclude to some form of inequalities - regressivity and urban/rural gap - and call for "energy efficiency policy to reduce distributive impacts for the vulnerable households" => that's what we study! 2/14

📖 Regressivity means that the ratio of carbon tax payments to income or expenditures is larger for poorer households than for richer ones (holds in both cases in France!)
The rural-urban gap is the difference in carbon tax paid based on where you live irrespective of income 3/14

In this paper we model a full policy package at both macro and micro-level to assess the distributive impacts of several measures over time. Can the mix of a carbon tax, subsidies to electric vehicles 🚗 and thermal renovation 🛠🏡 make the low-carbon transition progressive? 4/14

The answer is that without lump-sum transfers to HH: the carbon tax is regressive, income inequalities (Gini) increase due to env. pol. but increase in poverty is limited.
Results hold either under Net Zero Emissions (NZE) or in F4 cutting emissions by 4. 5/14

Redistributing to households the carbon tax they pay can make the whole package progressive and ↘️ income inequalities and poverty: the most ambitious Net Zero Emissions is fairer than the counterfactual F4!! 6/14

One can redistribute the carbon tax revenues a million different ways: put the emphasis on low-income deciles (compensating at least 83% of them) or on rural households depending on objectives and public acceptability 7/14

The distribution of subsidies for electric 🚗 and 🛠🏡 to energy-intensive households is key!
Maximises emissions reduction (+15pts if wrong targeting)
Decreases carbon tax bills for all and especially rural households
Reduces urban/rural divide 8/14

The volume of subsidies is not nearly as important as the selection of beneficiaries for decreasing inequalities & carbon tax bills. NB: subsidies benefit greatly rich HH
Reading: Max energy savings means that energy intensive households are selected first (resp Median/Min) 9/14

Rural HH are large energy consumers. Hence subsidies for electric 🚗 and 🛠🏡 works particularly well to bridge the gap between rural and urban 10/14

Subsidies are efficient but take time to reach a critical volume. In the short term (2025), recycling of carbon tax revenues limits inequalities and in the mid-long term (2030-2035) subsidies decrease carbon tax bills. All are compatible in the long & short term! 11/14

A bit about the method we use with my awesome co-authors: #FrédéricGhersi and #FranckNadaud. We combine a macro-model #IMACLIM and a new microsimulation model #MATISSE.
In IMACLIM, we forecast the French economy to 2025, 2030 and 2035 and get prices and incomes evolution 12/14

MATISSE model is based on the French Household survey. We simulate household reaction to new prices and incomes using long-term elasticities (14 goods, 40 classes of HH)
Plus, we explicitly model the adoption of a new electric vehicle 🚗, new house or thermal renovation 🏡 13/14

MATISSE is the Microsimulation Assessment within the low-carbon Transition of Inequalities and Sustainable Systems of Energy and represents disaggregated household behaviour and explicit penetration of electric vehicles and thermal renovations at various time horizons 14/14

Thanks for reading me! Here is the link to the paper with much more in it: doi.org/10.1016/j.ecol…

You might find it interesting @CelineGuivarch @aureliemejean @EmmanuelCombet @jan_c_steckel @drkaenzig @mkalkuhl @adrien_fabre @_MartinHaensel @JKSteinberger

If you have not access to Elsevier, you can find the author free pdf version on my website: emilienravigne.netlify.app
Please email-me if you need the supplementary material (calibration tables for reproduction of the simulations)