Equity Impacts of Energy and Climate Policy: Who is Shouldering the Burden?
WIREs Energy and Environment, Vol. 5, Issue 5, September/October, 2016, pp. 492-509
Carbon pricing, technological supports, and energy subsidies comprise the most-often implemented energy and climate policies. The cost of these policies has grown in recent years, resulting in equity impacts receiving greater attention by academics, policymakers, and the general public. While precise impacts are specific to particular circumstances, there are a number of primary channels through which energy and climate policies affect welfare. This paper gives an overview of how these channels operate. Where applicable, drivers of policy cost are outlined to show how these policies may grow to represent a meaningful welfare impact. Through case study analyses, we explain the most common mechanisms through which these policy costs drive equity outcomes. We review their implementation to date to give insight into the prevalence of these equity outcomes in an international context. Finally, we analyze the ability of remedial measures to counteract inequitable impacts.