Distributional Impacts of Energy Policies in India

Distributional Impacts of Energy Policies in India
Author: Narasimha Desirazu Rao
Publisher: Stanford University
Total Pages: 152
Release: 2011
Genre:
ISBN:

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While there is much agreement in the climate policy literature that climate change mitigation should not interfere with humans' ability to enjoy a minimal standard of living, there is little scholarship on how to carve out such an "exemption" for poor subpopulations within large developing economies. Further, there is little analysis in developing countries of how the burdens of specific mitigation policies would be distributed. This dissertation begins to fill these gaps. This work consists of three studies, the first two of which are positive studies of the income distributional impacts of two energy policies that have climate mitigation benefits in Maharashtra, India: electricity pricing to recover low-carbon electric supply; and removal of the kerosene subsidy. In the first study I use an economic simulation model of the electricity sector and household welfare to assess the impacts of economy-wide electricity price increases under different political and institutional constraints. The analysis reveals that regulators can insulate low-income households from welfare losses without trading off aggregate welfare losses as long as they can raise prices to industry and high-income households. Mitigation may also have a co-benefit of reducing supply interruptions to the poor. In the second study, the kerosene subsidy is found to be progressive and material in urban areas, but regressive and less material in rural areas. One reason is that households' allocated quotas far exceed kerosene demand in rural areas, but fall short of many urban households' needs. A better targeted subsidy in urban areas alone would avoid high costs of the current subsidy, yet avoid the impoverishment of urban users from their complete removal. These results emphasize that protecting the interests of the poor in international climate change mitigation agreements requires some accountability from the institutions that implement mitigation policies within states. The third study questions the adequacy of burden-sharing proposals for climate mitigation that advocate an exemption for the poor without accounting for states' agency over the costs and outcomes of such an exemption. Participating states face moral hazards over the choice of future baselines of the poor's emissions. I show - using India for illustration - that the financial stakes for parties in how future growth is distributed in India can be up to tens of billions of dollars. Getting agreement on the terms of exemption may be easier if benefiting states adopt comparative benchmarks of accountability for the poor's emissions, but which do not infringe on particular policy choices. Furthermore, participating states should have shared duties to ensure that the poor receive the benefits of an awarded exemption.

Distributional Impacts of Energy Policies in India

Distributional Impacts of Energy Policies in India
Author: Narasimha Desirazu Rao
Publisher:
Total Pages:
Release: 2011
Genre:
ISBN:

Download Distributional Impacts of Energy Policies in India Book in PDF, Epub and Kindle

While there is much agreement in the climate policy literature that climate change mitigation should not interfere with humans' ability to enjoy a minimal standard of living, there is little scholarship on how to carve out such an "exemption" for poor subpopulations within large developing economies. Further, there is little analysis in developing countries of how the burdens of specific mitigation policies would be distributed. This dissertation begins to fill these gaps. This work consists of three studies, the first two of which are positive studies of the income distributional impacts of two energy policies that have climate mitigation benefits in Maharashtra, India: electricity pricing to recover low-carbon electric supply; and removal of the kerosene subsidy. In the first study I use an economic simulation model of the electricity sector and household welfare to assess the impacts of economy-wide electricity price increases under different political and institutional constraints. The analysis reveals that regulators can insulate low-income households from welfare losses without trading off aggregate welfare losses as long as they can raise prices to industry and high-income households. Mitigation may also have a co-benefit of reducing supply interruptions to the poor. In the second study, the kerosene subsidy is found to be progressive and material in urban areas, but regressive and less material in rural areas. One reason is that households' allocated quotas far exceed kerosene demand in rural areas, but fall short of many urban households' needs. A better targeted subsidy in urban areas alone would avoid high costs of the current subsidy, yet avoid the impoverishment of urban users from their complete removal. These results emphasize that protecting the interests of the poor in international climate change mitigation agreements requires some accountability from the institutions that implement mitigation policies within states. The third study questions the adequacy of burden-sharing proposals for climate mitigation that advocate an exemption for the poor without accounting for states' agency over the costs and outcomes of such an exemption. Participating states face moral hazards over the choice of future baselines of the poor's emissions. I show - using India for illustration - that the financial stakes for parties in how future growth is distributed in India can be up to tens of billions of dollars. Getting agreement on the terms of exemption may be easier if benefiting states adopt comparative benchmarks of accountability for the poor's emissions, but which do not infringe on particular policy choices. Furthermore, participating states should have shared duties to ensure that the poor receive the benefits of an awarded exemption.

The Poverty and Distributional Impacts of Carbon Pricing: Channels and Policy Implications

The Poverty and Distributional Impacts of Carbon Pricing: Channels and Policy Implications
Author: Baoping Shang
Publisher: International Monetary Fund
Total Pages: 32
Release: 2021-06-25
Genre: Business & Economics
ISBN: 151357339X

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Addressing the poverty and distributional impacts of carbon pricing reforms is critical for the success of ambitious actions in the fight against climate change. This paper uses a simple framework to systematically review the channels through which carbon pricing can potentially affect poverty and inequality. It finds that the channels differ in important ways along several dimensions. The paper also identifies several key gaps in the current literature and discusses some considerations on how policy designs could take into account the attributes of the channels in mitigating the impacts of carbon pricing reforms on households.

The Distributional Effects of Environmental Policy

The Distributional Effects of Environmental Policy
Author: Johnstone Nick
Publisher: OECD Publishing
Total Pages: 336
Release: 2006-02-23
Genre:
ISBN: 9264066136

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This book builds upon existing literature to simultaneously examine disparities in the distribution of environmental impacts of environmental policy and in the distribution of financial effects among households.

Food for Fuel

Food for Fuel
Author: Ujjayant Chakravorty
Publisher:
Total Pages: 44
Release: 2012
Genre:
ISBN:

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Energy Policy Review

Energy Policy Review
Author: Great Britain. Department of Energy
Publisher:
Total Pages: 68
Release: 1977
Genre: Political Science
ISBN:

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The Geopolitics of the Global Energy Transition

The Geopolitics of the Global Energy Transition
Author: Manfred Hafner
Publisher: Springer Nature
Total Pages: 398
Release: 2020-06-09
Genre: Political Science
ISBN: 3030390667

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The world is currently undergoing an historic energy transition, driven by increasingly stringent decarbonisation policies and rapid advances in low-carbon technologies. The large-scale shift to low-carbon energy is disrupting the global energy system, impacting whole economies, and changing the political dynamics within and between countries. This open access book, written by leading energy scholars, examines the economic and geopolitical implications of the global energy transition, from both regional and thematic perspectives. The first part of the book addresses the geopolitical implications in the world’s main energy-producing and energy-consuming regions, while the second presents in-depth case studies on selected issues, ranging from the geopolitics of renewable energy, to the mineral foundations of the global energy transformation, to governance issues in connection with the changing global energy order. Given its scope, the book will appeal to researchers in energy, climate change and international relations, as well as to professionals working in the energy industry.

The Distributional Implications of the Impact of Fuel Price Increases on Inflation

The Distributional Implications of the Impact of Fuel Price Increases on Inflation
Author: Mr. Kangni R Kpodar
Publisher: International Monetary Fund
Total Pages: 34
Release: 2021-11-12
Genre: Business & Economics
ISBN: 1616356154

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This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.

Fuel Taxes and the Poor

Fuel Taxes and the Poor
Author: Thomas Sterner
Publisher: Taylor & Francis
Total Pages: 385
Release: 2012-03-29
Genre: Law
ISBN: 1136521720

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Fuel Taxes and the Poor challenges the conventional wisdom that gasoline taxation, an important and much-debated instrument of climate policy, has a disproportionately detrimental effect on poor people. Increased fuel taxes carry the potential to mitigate carbon emissions, reduce congestion, and improve local urban environment. As such, higher gasoline taxes could prove to be a fundamental part of any climate action plan. However, they have been resisted by powerful lobbies that have persuaded people that increased fuel taxation would be regressive. Reporting on examples of over two dozen countries, this book sets out to empirically investigate this claim. The authors conclude that while there may be some slight regressivity in some high-income countries, as a general rule, fuel taxation is a progressive policy particularly in low income countries. Rich countries can correct for regressivity by cutting back on other taxes that adversely affect poor people, or by spending more money on services for the poor. Meanwhile, in low-income countries, poor people spend a very small share of their money on fuel for transport. Some costs from fuel taxes may be passed on to poor people through more expensive public transportation and food transport. Nevertheless, in general the authors find that gasoline taxes become more progressive as the income of the country in question decreases. This book provides strong arguments for the proponents of environmental taxation. It has immediate policy implications at the intersection of multiple subject areas, including transportation, environmental regulation, development studies, and climate change. Published with Environment for Development initiative.

Energy Subsidy Reform

Energy Subsidy Reform
Author: Mr.Benedict J. Clements
Publisher: International Monetary Fund
Total Pages: 390
Release: 2013-09-13
Genre: Business & Economics
ISBN: 1484339169

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Energy subsidies are aimed at protecting consumers, however, subsidies aggravate fiscal imbalances, crowd out priority public spending, and depress private investment, including in the energy sector. This book provides the most comprehensive estimates of energy subsidies currently available for 176 countries and an analysis of “how to do” energy subsidy reform, drawing on insights from 22 country case studies undertaken by the IMF staff and analyses carried out by other institutions.