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Keywords:Carbon taxation 

Working Paper
The Distributional Effects of a Carbon Tax on Current and Future Generations

This paper examines the non-environmental welfare effects of introducing a revenue- neutral carbon tax policy. Using a life cycle model, we find that the welfare effects of the policy differ substantially for agents who are alive when the policy is enacted compared to those who are born into the new steady state with the carbon tax in place. Consistent with previous studies, we demonstrate that, for those born in the new steady state, the welfare costs are always lower when the carbon tax revenue is used to reduce an existing distortionary tax as opposed to being returned in the form of ...
Finance and Economics Discussion Series , Paper 2016-038

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