Skip to main content
Research article - Peer-reviewed, 2004

Carbon tax simulations using a household demand model

Brannlund R, Nordstrom J


The main objective of this paper is to analyse consumer response and welfare effects due to changes in energy or environmental policy. To achieve this objective we formulate and estimate an econometric model for non-durable consumer demand in Sweden that utilises micro- and macro-data. In the simulations, we consider two revenue neutral scenarios that both imply a doubling of the CO2 tax; one that returns the revenues in the form of a lower VAT and one that subsidise public transport. One conclusion from the simulations is that the CO2 tax has regional distribution effects, in the sense that household living in sparsely populated areas carry a larger share of the tax burden. (C) 2002 Elsevier B.V. All rights reserved

Published in

European Economic Review
2004, Volume: 48, number: 1, pages: 211-233

    SLU Authors

    UKÄ Subject classification

    Economics and Business
    Social Sciences

    Publication Identifiers


    Permanent link to this page (URI)