Economic Instruments for a Socially Neutral National Home Energy Efficiency Programme

summary:

The research reported in this paper was conducted under the project The Social Impacts of Environmental Taxes: Removing Regressivity, funded by the Joseph Rowntree Foundation under its Programme on Environment and Social Concerns. The project is investigating the social implications of environmental taxes and charges in relation to four environmental issues—the household use of energy, water, and transport, and the generation of waste.

This is a report of the component on the household use of energy.

Energy use by, and carbon emissions from, UK households are rising. A contributing factor is that household energy prices are relatively low, so that households have little incentive to implement the energy efficiency measures which are cost effective even at these low prices. The hypothesis underlying the first stage of the research was that the incentives to implement these measures could be increased by imposing a carbon tax on the household use of energy, and that redistribution through the benefit system of some or all of the revenues from the tax could prevent low-income households being made worse off.

Research Discussion Paper 18

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