TY  - JOUR
AU  - Parry,Ian W.H.
AU  - Sigman,Hilary
AU  - Walls,Margaret
AU  - Williams,Roberton C.,III
TI  - The Incidence of Pollution Control Policies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11438
PY  - 2005
Y2  - June 2005
UR  - http://www.nber.org/papers/w11438
L1  - http://www.nber.org/papers/w11438.pdf
N1  - Author contact info:
Ian Parry
IMF
E-Mail: iparry@imf.org

Hilary Sigman
Department of Economics
Rutgers University
75 Hamilton Street
New Brunswick, NJ  08901-1248
Fax: 732/932-7416
E-Mail: sigman@econ.rutgers.edu

Margaret A. Walls
Resident Scholar
Resources for the Future
1616 P Street, NW
Washington, DC 20036
Tel: 202/328-5092
Fax: 202/939-3406
E-Mail: walls@rff.org

Roberton C. Williams, III
Department of Agricultural and Resource Economics
University of Maryland,
Symons Hall
College Park, MD 20742
Tel: 301-405-1284
Fax: 301-314-9091
E-Mail: rwilliams@arec.umd.edu
M2  - featured in NBER digest on 2005-06-27
AB  - This paper reviews theoretical and empirical literature on the household distribution of the costs and benefits of pollution control policies, and ways of integrating distributional issues into environmental cost/benefit analysis. Most studies find that policy costs fall disproportionately on poorer groups, though this is less pronounced when lifetime income is used, and policies affect prices of inputs used pervasively across the economy. The policy instrument itself is also critical; freely allocated emission permits may hurt the poor the most, as they transfer income to shareholders via scarcity rents created by higher prices, while emissions taxes offer opportunities for progressive revenue recycling. And although low-income households appear to bear a disproportionate share of environmental risks, policies that reduce risks are not always progressive, for example, they may alter property values in ways that benefit the wealthy. The review concludes by noting a number of areas where future research is badly needed.
ER  -