Distributional impacts from energy and environmental policies Sample Clauses

Distributional impacts from energy and environmental policies. This section provides a short literature overview of possible distributional impacts of different environmental policies. As the literature on environmental policies and distributional effects is vast, we focus here on the main reasons why distributional impacts may occur and their relevance for environmental policy assessment. Depending on the chosen policy instrument and the underlying socio-economic structure, distributional impacts of environmental policies may vary significantly, both between countries and within countries.[5–7] Overall, environmental policies are usually associated with regressive distributional impacts in literature, disproportionately affecting disadvantaged population groups. There is, however, also evidence for progressive impacts, especially in developing countries, where inequalities can be effectively reduced.[7,8] The focus and significance of distributional impacts vary depending on the unit of analysis, i.e., the spatial scale of the study, the chosen indicator(s) concerning inequalities considered and sectors/goods affected.[7] For a detailed discussion of possible distributional impacts of individual policies, the reader may refer to [7,8]. Evaluating distributional impacts of environmental policies should consider both financial implications, i.e., impacts on income and wealth distribution, and possible environmental benefits in the form of reduced environmental hazards or improved accessibility to environmental goods.[8] The latter is, however, difficult to assess quantitatively and may vary greatly on a geographic scale. Additionally, the relationship between a lower socio-economic status and higher exposure to environmental hazards is ubiquitous, especially within countries.[8,9] Thus, assessments of distributional impacts of energy and climate policies often concentrate on income distribution, neglecting possible benefits from reduced environmental inequalities or other indirect effects. Financial implications usually depend on the demand elasticities of the affected goods and possible budget or credit constraints associated with socio-economic status, e.g., different disposable income, owned assets, or accessibility to technologies.[7] Depending on how the policy is funded and on who consumes the affected goods, distributional effects may impact households, industries or states both negatively or positively. Well- designed strategies may also achieve progressive outcomes by considering appropriate compensation schem...