Distributional Impacts of Energy-Heat Cross-Subsidization.

Clicks: 173
ID: 18471
2019
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Abstract
Energy and heat cross-subsidies are common in developing and transitioning countries, but the distributional and efficiency impacts of these policies (and reform) are largely unknown. In Post-Soviet countries such as Belarus, revenues from an industrial tariff on electricity are used to cross-subsidize heating for households. We analyze the distributional impacts of cross-subsidy reform with both input output methods and a calibrated static computable general equilibrium (CGE) model with heterogeneous households based on a household consumption survey. On average, GDP gains of roughly a quarter of a percent are computed across model runs which reduce taxes and subsidies from cross-subsidization. Reducing household heating subsidy rates equally across income groups is found to be regressive. Poorer households are overly-burdened due to higher heating expenditures while richer households enjoy gains from cheaper market prices for goods. The GDP gains are even larger when the tax rates are structured to create a distributionally-neutral reform.
Reference Key
grainger2019distributionalenergy Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Grainger, Corbett;Schreiber, Andrew;Zhang, Fan;
Journal energy policy
Year 2019
DOI
10.1016/j.enpol.2018.10.005
URL
Keywords Keywords not found

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