Carbon tax simulations using a household demand model

摘要

The main objective of this paper is to analyse consumer response and welfare effects due to changes in energy or environmental policy. To achieve this objective we formulate and estimate an econometric model for non-durable consumer demand in Sweden that utilises micro- and macro-data. In the simulations, we consider two revenue neutral scenarios that both imply a doubling of the CO_2 tax; one that returns the revenues in the form of a lower VAT and one that subsidise public transport. One conclusionfrom the simulations is that the CO_2 tax has regional distribution effects, in the sense that household living in sparsely populated areas carry a larger share of the tax burden.