TY  - JOUR
AU  - Fullerton,Don
TI  - Six Distributional Effects of Environmental Policy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16703
PY  - 2011
Y2  - January 2011
UR  - http://www.nber.org/papers/w16703
L1  - http://www.nber.org/papers/w16703.pdf
N1  - Author contact info:
Don Fullerton
Department of Finance
University of Illinois
BIF Box#30 (MC520)
515 East Gregory Drive
Champaign, IL  61820
Tel: 217/244-3621
Fax: 217/244-3102
E-Mail: dfullert@illinois.edu
AB  - While prior literature has identified various effects of environmental policy, this note uses the example of a proposed carbon permit system to illustrate and discuss six different types of distributional effects: (1) higher prices of carbon-intensive products, (2) changes in relative returns to factors like labor, capital, and resources, (3) allocation of scarcity rents from a restricted number of permits, (4) distribution of the benefits from improvements in environmental quality, (5) temporary effects during the transition, and (6) capitalization of all those effects into prices of land, corporate stock, or house values.  The note also discusses whether all six effects could be regressive, that is, whether carbon policy could place disproportionate burden on the poor.
ER  -