PhD defense: Emilien Ravigné

Summary

Climate change is mainly anthropogenic, and if not limited quickly it will cause huge damage to the most vulnerable populations. Reducing emissions will require massive efforts and investments. This dissertation assesses how the costs of climate change mitigation policies are distributed among households and workers in order to maximise their social acceptability and promote a just transition. The four chapters are independent and divided between the study of household consumption and income.

In the first chapter, co-authored with Franck Nadaud, we study how households react to the introduction of a carbon tax followed by the redistribution of the tax revenues. We estimate the price and income elasticities of 40 classes of households for 14 goods and build a microsimulation model to test the consequences of different tax levels and revenue distribution schemes of the carbon tax. Redistributing the entire carbon tax revenue limits the total reduction of emissions but ensures the progressivity of the tax which otherwise would fall more heavily on the poor and rural. I find that a carbon tax of €158/tCO2eq redistributed as an equal per capita cash transfer to households would reduce the total carbon footprint of households by 5.9%. We highlight the existence of a counter-intuitive ’backfire’ effect for almost a quarter of households that increase their emissions after the introduction of the tax and recycling scheme.

The second chapter, published with Frédéric Ghersi and Franck Nadaud, studies the distributional impacts of a set of climate policies that would allow France to achieve carbon neutrality by 2050. These measures include an increasing carbon tax, subsidies for thermal renovations and for the purchase of electric vehicles. We model these measures at the aggregate and household levels by coupling a microsimulation model with a macroeconomic model. We conclude that the package of measures is regressive if there is no recycling of carbon tax revenues. In other words, subsidies for thermal renovations and electric vehicles do not compensate for the regressivity of the carbon tax in the short run but are complementary to recycling. A targeted distribution of subsidies to energy-intensive households is key to maximise emission reductions and limit territorial inequalities between urban and rural areas.

The third chapter examines the determinants of technical change. Together with Mehdi Senouci, we create a technical change and growth accounting framework to disentangle between factor substitution and specific factor-saving technical change in the production of various industries. We conclude that most European and US industries between 1970 and 2019 are net capital-saving with an increasing trend towards net labour-saving. We show that industries tend to be labour-saving when the relative price of labour rises: it shows that technical change is endogenous and price-induced. We add a preliminary extension by including energy, materials and services in the analysis of the direction of technical change.

The fourth and final chapter, published with Pascal da Costa, is a case study of the adoption of a green technology, natural gas trucks, in the supply chain of a large firm. We show that the actual conditions of use, both economic and physical, can undermine the environmental gains of natural gas trucks if they do not use biogas. Public policies — taxes and subsidies — if well designed, can encourage the adoption of these trucks and the use of biogas to massively reduce emissions from the road sector.