General-equilibrium incidence of energy taxation

Thesis/Dissertation · Sat Jan 01 04:00:00 EST 1983

OSTI ID:5312536

Solow, J L

Taxes on energy consumption, energy-import tariffs, and subsidization of domestic energy production have recently been offered as policies intended to reduce dependency on uncertain sources of foreign energy supply. This dissertation addresses the distributional consequences of such broadly-based energy-taxation policies. Particular attention is focused on the incidence of such policies on payments to factors, and on relative prices of consumption goods. These aspects of energy policy incidence are first considered separately. An expression for the impact of an energy tax on the rental/wage ratio is derived from a two-sector general equilibrium model with intermediate goods. The incidence is a function of factor intensities and substitution possibilities, and of demand elasticities, where both factor intensities and substitution possibilities are measured so as to include both direct inputs and indirect inputs via intermediate goods. Reasonable parameter values imply that the tax is borne disproportionately by capital, and is thus progressive. The effect of an energy tax on output depends on variations in total energy intensities, where total includes both direct input and indirect input via intermediate goods. Intensities for a 36-sector breakdown of goods are calculated. Even with little disaggregation, relative price effects will be of the same order of magnitude as factor price impacts.

• OSTI ID: 5312536
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
298000 -- Energy Planning & Policy-- Consumption & Utilization
ECONOMIC IMPACT
ENERGY CONSUMPTION
ENERGY SOURCE DEVELOPMENT
INCOME DISTRIBUTION
TAXES