Macroeconomic and distributional consequences of net zero policies in the United Kingdom
This paper presents new simulation results for the UK combining macroeconomic simulations
in ThreeME, a computable general equilibrium model, with household-level micro-simulations
with the aim to provide consistent estimates of macroeconomic and distributional consequences
of policy action to curb greenhouse gas emissions. One main and overarching result
is that if an economy-wide and significant carbon price is introduced it leads to
large emission reductions. Macroeconomic and distributional consequences are very
limited in comparison. Redistributing 30% of total tax revenue as a lump-sum transfer
to households would ensure that a majority of income deciles in most regions increase
their disposable income, with gains notably in the lower part of the income distribution.
Published on December 19, 2022
In series:OECD Economics Department Working Papersview more titles