The distributional impacts of energy and climate policies can be assessed across a number of dimensions. Goulder and Parry (2008) note that two dimensions in particular have attracted attention: the impact on energy-intensive industry and the impact across households of differing incomes.
The income-distribution dimension plays a particularly significant role in policy circles given the results from a large number of studies indicating that energy taxes – and by extension carbon-pricing policies – are regressive. Studies that have documented the regressivity of energy taxes include Bull et al. (1994), Metcalf (1999), Dinan and Rogers (2002), West and Williams (2004), and Bento et al. (2009).
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