Delayed Action and Uncertain Targets: How Much Will Climate Policy Cost?

Abstract Swiss targets for climate policy require significant reductions of emissions by 2050. While such reductions can be achieved in a cost-efficient manner by employing taxes on greenhouse gas emissions, such taxes tend to lead to a regressive distribution of policy cost among households. To counteract such a regressive outcome, tax revenue may be recycled in a progressive way. This paper uses a computable general equilibrium model coupled with a microsimulation of household income and expenditure to examine the policy cost of different carbon tax policies and their distribution across households. I find that in the absence of revenue recycling, emission taxation leads to a regressive distribution of policy cost. I analyze different revenue recycling schemes (per-capita lump-sum transfers, reductions in labor taxation, and reductions in VAT taxation of necessary commodities) and their ability to avoid regressive outcomes.

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Climate policy cost-benefit model application for successful Central European building retrofitting programs—A Hungarian case study

International Journal of Engineering Business Management ◽

10.1177/1847979017717574 ◽

2017 ◽

Vol 9 ◽

pp. 184797901771757 ◽

Cited By ~ 1

Author(s):

Csaba Fogarassy ◽

Balint Horvath

Keyword(s):

Climate Policy ◽

Cost Benefit ◽

Building Sector ◽

Building Stock ◽

Existing Building ◽

Efficient Performance ◽

Effective Performance ◽

Hungarian Case ◽

Policy Cost ◽

Eastern European Countries

In general, European Union Member States attribute great importance to the building sector in reducing their greenhouse gas emissions as part of their climate policy strategies. The present study is aimed at studying what happens if decision-makers do not take any prominent measures to ensure that the building sector realizes more efficient performance. The current European tendencies indicate that the most common approach is to attempt to renovate the existing building stock. However, this is not always the best solution. In Central and Eastern European countries, such as Hungary, the greatest problem encountered in renovations is the outdated heating and electricity supply of the old buildings. Many experts are convinced that these buildings should be demolished now and replaced with new ones in order to achieve more effective performance. This study, besides the environmental matters presents a climate policy-related economic evaluation which strengthens the latter opinion. The purpose of this novel cost effectiveness analysis is to examine the long-term viability of these two approaches (retrofitting strategy vs. the building of new houses) from the aspect of both environmental conformity (climate friendliness) and sustainable economics between 2020 and 2030.

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