The Distributional Effects of Environmental Policy

The Distributional Effects of Environmental Policy

Edited by Ysé Serret and Nick Johnstone

This publication is a milestone in the analysis of the distributional impacts of environmental policy, building upon existing literature to simultaneously examine disparities in the distribution of environmental impacts and in the distribution of financial effects amongst households.

Chapter 1: Distributional Effects of Environmental Policy: Introduction

Nick Johnstone and Ysé Serret

Subjects: economics and finance, environmental economics, environment, environmental economics

Extract

1. Distributional effects of environmental policy: introduction Nick Johnstone and Ysé Serret 1. INTRODUCTION The present volume is concerned with the distributional impacts associated with the introduction of environmental policies. The book focuses on distributional impacts according to economic status, which is admittedly only one vector by which to assess the distributional questions of a policy. Other possible criteria could include ethnicity, age, geographical or temporal distribution. Each perspective raises complex issues dealt with in a specific literature and can be the subject of a further study by itself. Given the richness of the topic addressed, the intention in the present volume is to centre the approach on distributional issues across one criterion in order to further develop the analysis and review the empirical literature.1 The basic unit of analysis applied in the chapters that follow is the household, with a focus on their relative wealth. However, different criteria can be applied as ‘proxies’ for wealth, such as household current income or lifetime income, household expenditures or expanded notions of wealth. Current annual income has generally been used as a proxy for households’ wealth but such a measure is flawed because of its inability to reflect differences in household assets, life-cycle income effects, and other factors. However, while imperfect, it is a measure which is widely available. Where possible, other measures are sometimes used in the empirical studies discussed. Concern with the distributional impacts of environmental policy according to socio-economic status arises in part...