Local air pollution and global climate change taxes: a distributional analysis for the case of Spain

• Published in: Journal of environmental planning and management 2017-03, Vol.60 (3), p.419-436
• Main Authors: García-Muros, Xaquin, Burguillo, Mercedes, González-Eguino, Mikel, Romero-Jordán, Desiderio
• Format: Article
• Language: English
• Subjects: Air pollution; Air pollution measurements; Baskets; Carbon dioxide; Citizens; Climate change; cocal air pollution taxes; Constraints; distributional impact; Economic models; Efficiency; Environmental policy; environmental tax reform; global climate change taxes; Low income groups; Neutrality; Pollutants; Pollution; Pollution taxes; Recycling; Regression analysis; Revenue; Revenues; Support groups; Taxation; Taxes; taxes regressivity; Weight
• ISSN: 0964-0568; 1360-0559
• DOI: 10.1080/09640568.2016.1159951

Global climate change measures are difficult to implement. In this context, local air pollution measures may play an important role in the political agenda since their effects are felt more immediately by citizens. Distributional implications are one of the main barriers for implementing environmental policies. This paper explores the distributional implications of air pollution taxes and compares them to climate change taxes. For the comparison, both tax schemes were set to yield the same revenue. Methodologically, the study uses a top-down approach linking a macro model to a micro model. We find that taxes on local air pollutants are more regressive than those levied on CO 2 . This is because the goods implicitly taxed have a greater weight in the consumer basket of low-income groups, even if the tax revenues are recycled. Furthermore, the revenue-neutral recycle scheme increases both taxes efficiency, but, at the same time, can increase regressivity.