Equity implications of climate policy: Assessing the social and distributional impacts of emission reduction targets in the European Union

Fragkos, Panagiotis; Fragkiadakis, Kostas; Sovacool, Benjamin K.; Paroussos, Leonidas; Vrontisi, Zoi; Charalampidis, Ioannis

doi:10.1016/j.energy.2021.121591

Cited by 36 publications

(17 citation statements)

References 42 publications

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“…This is in line with the findings of Che and Jiang [49] and Nagaj [86] that government financial spending has a significant positive impact on alleviating fuel poverty. Similar to Fragkos et al [72], it was also found that taxes imposed on energy products can increase the risk of fuel poverty. However, there are differences with respect to the total tax burden, as the author's results indicated that it may contribute to lower fuel poverty rate.…”

Section: Discussionsupporting

confidence: 61%

“…Moreover, this impact is felt more in emerging economies than in developed economies. Confirmation of the fact that state policies can affect fuel poverty is provided by Fragkos et al [72] and Dong, Ren, and Zhao's [73] studies on the implications of climate policies. The results of the Fragkos et al [72] study showed that the transition to climate neutrality may, among other things, increase fuel poverty, especially in low-income households.…”

Section: Determinants Of Fuel Poverty and Policies To Reduce Itmentioning

confidence: 84%

“…Confirmation of the fact that state policies can affect fuel poverty is provided by Fragkos et al [72] and Dong, Ren, and Zhao's [73] studies on the implications of climate policies. The results of the Fragkos et al [72] study showed that the transition to climate neutrality may, among other things, increase fuel poverty, especially in low-income households. This may be accomplished through the impact of this policy on increasing income inequality.…”

Section: Determinants Of Fuel Poverty and Policies To Reduce Itmentioning

confidence: 84%

“…Hence, in the context of studying fuel poverty, the share of energy from renewable sources is an important factor. In addition, the literature indicates [49,72,73] that energy and climate policies themselves can affect citizens' incomes, just as economic prosperity affects the amount of energy consumed and the environmental impact of sectors [84]. For this reason, when establishing a list of independent variables affecting fuel poverty, it is important to keep in mind the interdependence between factors.…”

Section: Methodsmentioning

confidence: 99%

“…As indicated in Section 2.2, the government, through its various measures, influences the scale of fuel poverty, mostly indirectly. The literature here mainly points to taxes [21,33,72], various subsidies, and social benefits [30,74]. Since the literature draws attention to the role of income and GDP growth [25,74], and monetary policy is one of the two basic macroeconomic policies determining GDP growth, the author included instruments related to monetary policy in the analysis, e.g.., changes in money supply and interest rates, among the potential factors that could determine fuel poverty in Poland (as well as in other EU countries.…”

Section: Methodsmentioning

confidence: 99%

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Macroeconomic Policy versus Fuel Poverty in Poland—Support or Barrier

Nagaj

2022

Energies

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: Energy and climate policies play an increasingly important role in the world in the era of climate change and rising energy prices. More often, the importance of the development of the energy sector and climate protection is seen from the point of view of the expenditures that will need to be absorbed in the economy, with the potential for increased energy prices. However, it should be remembered that this is also related to the issue of fuel poverty and the inability to meet basic energy needs by parts of society. The aim of the paper is to assess the importance of macroeconomic policy instruments in reducing fuel poverty, using Poland as an example. It will be examined whether and how the government influenced this phenomenon (directly or indirectly), through which instruments, and which instruments (fiscal, monetary or energy-climate policy) played the most important role in shaping the scale of fuel poverty in Poland, with an emphasis on the role of monetary and fiscal policy instruments. The analysis covered the period from 2004 to mid-2021. The results of the research showed that in Poland there is a lack of policy directly aimed at reducing fuel poverty, and the government affects the scale of fuel poverty indirectly mainly through macroeconomic policy instruments, i.e., fiscal and monetary policy instruments. The main and most effective instruments for reducing fuel poverty in Poland are social transfers. Other instruments that have a statistically significant impact on this poverty rate are the level of tax burdens and short-term interest rates. The analysis also revealed some opportunities for effective fuel poverty reduction policies. It was proven that in addition to fiscal policy, monetary policy, which would stimulate a decrease in short-term interest rates, is also an effective way to reduce the fuel poverty rate in Poland.

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Section: Discussionsupporting

confidence: 61%

Section: Determinants Of Fuel Poverty and Policies To Reduce Itmentioning

confidence: 84%

Section: Determinants Of Fuel Poverty and Policies To Reduce Itmentioning

confidence: 84%

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

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Macroeconomic Policy versus Fuel Poverty in Poland—Support or Barrier

Nagaj

2022

Energies

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Energy Poverty and Just Transformation in Greece

Fragkos,

Kanellou,

Konstantopoulos

et al. 2023

Studies in Energy, Resource and Environmental Economics

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Low-income population groups often face high energy poverty risks. This phenomenon can be exacerbated through the implementation of ambitious environmental policies to achieve the energy transition—said policies, such as the application of additional taxes on energy products, may lead to regressive social and distributional impacts on low-income households thus increasing the risk of energy poverty. This study focusses on Greece and combines a qualitative analysis of the EU and Greek policy context and strategic framework for energy poverty as well as related poverty alleviation measures with a state-of-the-art model-based assessment of the equity and distributional impacts of the net-zero transition in the country. We use the GEM-E3-FIT general equilibrium model, expanded to represent ten income classes differentiated by income sources, saving rates and consumption patterns. The new modelling capabilities of GEM-E3-FIT are applied to quantify the distributional impacts of ambitious emission reduction targets and at the same time explore their effects on energy-related expenditure and energy poverty by income class in Greece. The country’s transition to climate neutrality increases modestly the income inequality across income classes, with low-income households facing the most negative effects. However, using carbon tax revenues as lump-sum transfers to support household income and as reduced social security contributions have the potential to boost employment and scale down income inequality in Greece.

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Mapping regional vulnerability in Europe’s energy transition: development and application of an indicator to assess declining employment in four carbon-intensive industries

McDowall

Reinauer

Fragkos³

et al. 2023

Climatic Change

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Europe’s transition to an energy system compatible with limiting global heating to 1.5 °C will require radical changes in energy systems. While this will create substantial new growth industries in clean technologies, some currently important economic activities will decline. The impacts of that transition will not be the same for all regions. We map the economic vulnerability of European regions to ambitious decarbonisation scenarios in terms of employment losses in four carbon-intensive industries. To do so, we develop a composite vulnerability indicator that combines each region’s share of employment in those high-carbon industries with other dimensions of vulnerability and resilience. We then explore how regional patterns of vulnerability are influenced by the technology pathway to 2050, using four scenarios modelled using the European PRIMES model. We show that economic vulnerability to the low-carbon transition is regionally concentrated, with some regions combining high employment shares in industries expected to decline with weak adaptive capacity and high pre-existing unemployment. We also show that there is little variation in regional vulnerability arising from different transition pathways. All scenarios compatible with 1.5 °C involve large declines in all high-carbon sectors we analyse, and as a result, scenario variation does not lead to large variation in relative vulnerability of regions. The results highlight regions that may be in need of additional policy support to diversify their economies and achieve a just transition.

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Equity implications of climate policy: Assessing the social and distributional impacts of emission reduction targets in the European Union

Cited by 36 publications

References 42 publications

Macroeconomic Policy versus Fuel Poverty in Poland—Support or Barrier

Macroeconomic Policy versus Fuel Poverty in Poland—Support or Barrier

Energy Poverty and Just Transformation in Greece

Mapping regional vulnerability in Europe’s energy transition: development and application of an indicator to assess declining employment in four carbon-intensive industries

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