Many effects of environmental and energy policy are likely to disproportionately burden those with low income. First, it raises the price of fossil-fuel-intensive products that constitute a high fraction of low-income budgets (like gasoline, heating fuel and electricity). Second, the handout of pollution permits to firms provides value to those who own them. Third, low-income individuals may place more value on food and shelter than on improvements in environmental quality, so high-income individuals may get the most benefit of pollution abatement. Fourth, air quality improvements may raise the value of houses owned by landlords, rather than helping renters. These effects might all hurt the poor more than the rich. This book brings together the seminal economics literature that studies whether these fears are valid and whether anything can be done about them.
Contents: Introduction; Part I Conceptual Overview: A framework to compare environmental policies, Don Fullerton. Part II Costs to Consumers: Is the gasoline tax regressive?, James M. Poterba; Distributional aspects of an environmental tax shift: the case of motor vehicle emissions taxes, Margaret Walls and Jean Hanson; A distributional analysis of green tax reforms, Gilbert E. Metcalf; Distributional effects of alternative vehicle pollution control policies, Sarah E. West; Estimates from a consumer demand system: implications for the incidence of environmental taxes, Sarah E. West and Roberton C. Williams III. Part III Costs to Producers or Factors: An overlapping generations model of growth and the environment, A. John and R. Pecchenino; The general equilibrium incidence of environmental taxes, Don Fullerton and Garth Heutel. Part IV Benefits via Scarcity Rents: A positive theory of environmental quality regulation, Michael T. Maloney and Robert E. McCormick; Distributional effects of carbon allowance trading: how government decisions determine winners and losers, Terry Dinan and Diane Lim Rogers; Are emissions permits regressive?, Ian W.H. Parry; On the (ir)relevance of distribution and labor supply distortion to government policy, Louis Kaplow; Efficiency costs of meeting industry-distributional constraints under environmental permits and taxes, A. Lans Bovenberg, Lawrence H. Goulder and Derek J. Gurney. Part V Benefits of Protection: The distribution of pollution: community characteristics and exposure to air toxics, Nancy Brooks and Rajiv Sethi; A random utility model of environmental equity, Diane Hite; 'Optimal' pollution abatement - whose benefits matter, and how much?, Wayne B. Gray and Ronald J. Shadbegian; Does the value of a statistical life vary with age and health status? Evidence from the US and Canada, Anna Alberini, Maureen Cropper, Alan Krupnick and Nathalie B. Simon; Evidence of environmental migration, Trudy Ann Cameron and Ian T. McConnaha. P
Don Fullerton is a Professor in the Department of Finance at the University of Illinois, USA