2019 Volume 32 Issue 4 Pages 103-112
In this paper, we estimate the short-term impact of carbon tax and feed-in tariff on the industry and household expenditure, using an input-output analysis. We use the 2011 input-output table to estimate the change in commodity prices using a price model. As for the impact on the household expenditure, we use the data from the “Family Income and Expenditure Survey” (Statistics Bureau) and link the price change determined from the input-output model to the quantity listed in the survey.
We find that the feed-in tariff increases commodity prices more than the carbon tax, while the carbon tax increases household expenditure more than the feed-in tariff. As for households, the analysis revealed that the burden is higher for low income households, households living in colder regions, and senior households. Furthermore, we analyze the cases where mitigation policies are introduced to specific industries. The results show that the policy alleviates the burden in both industry and households, while not reducing the regressivity.
