• search hit 1 of 2
Back to Result List

Poverty and distributional effects of carbon pricing in low- and middle- income countries

  • Even though concerns about adverse distributional implications for the poor are one of the most important political challenges for carbon pricing, the existing literature reveals ambiguous results. For this reason, we assess the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. Building on a consistent dataset and method, we find that for countries with per capita incomes of below USD 15,000 per year (at PPP-adjusted 2011 USD) carbon pricing has, on average, progressive distributional effects. We also develop a novel decomposition technique to show that distributional outcomes are primarily determined by differences among income groups in consumption patterns of energy, rather than of food, goods or services. We argue that an inverse U-shape relationship between energy expenditure shares and income explains why carbon pricing tends to be regressive in countries with relatively higher income. Since these countries are likely to have more financial resourcesEven though concerns about adverse distributional implications for the poor are one of the most important political challenges for carbon pricing, the existing literature reveals ambiguous results. For this reason, we assess the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. Building on a consistent dataset and method, we find that for countries with per capita incomes of below USD 15,000 per year (at PPP-adjusted 2011 USD) carbon pricing has, on average, progressive distributional effects. We also develop a novel decomposition technique to show that distributional outcomes are primarily determined by differences among income groups in consumption patterns of energy, rather than of food, goods or services. We argue that an inverse U-shape relationship between energy expenditure shares and income explains why carbon pricing tends to be regressive in countries with relatively higher income. Since these countries are likely to have more financial resources and institutional capacities to deal with distributional issues, our findings suggest that mitigating climate change, raising domestic revenue and reducing economic inequality are not mutually exclusive, even in low- and middle-income countries.show moreshow less

Download full text files

  • pwsr103.pdfeng
    (1171KB)

    SHA-1:5b130965904c61325e30a91e20b32f91bcc1f2e5

Export metadata

Additional Services

Search Google Scholar Statistics
Metadaten
Author details:Ira Irina Dorband, Michael Jakob, Matthias KalkuhlORCiDGND, Jan Christoph SteckelORCiDGND
URN:urn:nbn:de:kobv:517-opus4-424592
DOI:https://doi.org/10.25932/publishup-42459
ISSN:1867-5808
Title of parent work (English):Postprints der Universität Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe
Subtitle (English):a global comparative analysis
Publication series (Volume number):Zweitveröffentlichungen der Universität Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe (103)
Publication type:Postprint
Language:English
Date of first publication:2019/02/22
Publication year:2018
Publishing institution:Universität Potsdam
Release date:2019/02/22
Tag:carbon pricing; decomposition analysis; distributional effect; global comparison; household data; low- and middle-income countries
Issue:103
Number of pages:12
Source:World Development 115 (2019), pp. 246–257 DOI 10.1016/j.worlddev.2018.11.015
Organizational units:Wirtschafts- und Sozialwissenschaftliche Fakultät
DDC classification:3 Sozialwissenschaften / 30 Sozialwissenschaften, Soziologie / 300 Sozialwissenschaften
3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Peer review:Referiert
Publishing method:Open Access
License (German):License LogoCC-BY-NC-ND - Namensnennung, nicht kommerziell, keine Bearbeitungen 4.0 International
External remark:Bibliographieeintrag der Originalveröffentlichung/Quelle
Accept ✔
This website uses technically necessary session cookies. By continuing to use the website, you agree to this. You can find our privacy policy here.