Energy policy with externalities and internalities

• 成果类型: Article
• 署名作者: Allcott, Hunt; Mullainathan, Sendhil; Taubinsky, Dmitry
• 署名单位: New York University; National Bureau of Economic Research; Harvard University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2014.01.004
• 发表日期: 2014
• 页码: 72-88
• 关键词: Energy efficiency; Energy-using durables; Implied discount rates; Inattention; Internality taxes; optimal taxation; present bias; Pigouvian taxes

摘要

We analyze optimal policy when consumers of energy-using durables undervalue energy costs relative to their private optima. First, there is an Internality Dividend from Externality Taxes: aside from reducing externalities, they also offset distortions from underinvestment in energy efficiency. Discrete choice simulations of the auto market suggest that the Internality Dividend could more than double the social welfare gains from a carbon tax at marginal damages. Second, we develop the Internality Targeting Principle: the optimal combination of multiple instruments depends on the average internality of the consumers marginal to each instrument Because consumers who undervalue energy costs are mechanically less responsive to energy taxes, the optimal policy will tend to involve an energy tax below marginal damages coupled with a larger subsidy for energy efficient products. Third, although the exact optimal policy depends on joint distributions of unobservables which would be difficult to estimate, we develop formulas to closely approximate optimal policy and welfare effects based on reduced form sufficient statistics that can be estimated by using field experiments or quasi-experimental variation in product prices and energy costs. (C) 2014 Elsevier B.V. All rights reserved.