The Green Dividend Dilemma: Carbon Dividends Versus Double-Dividends Accessible Data
Figure 1: CEV: Agents Alive At Time of Shock
Figure displays the average non-environmental welfare effects (expressed as a percentage, y-axis) for each age cohort at the time of the policy adoption (x-axis). Positive numbers represent a welfare increase as a result of the tax policy change and negative numbers represent a welfare decrease. Agents that are very young (i.e., just entering the workforce) at the time the carbon tax and lump-sum rebate policy is adopted experience a small decrease in non-environmental welfare. In contrast, the policy increases the average welfare of agents older than 40 at the time of adoption. In short: the lump-sum rebate policy increases the overall average welfare of the current living population.
Note: The figure displays the average non-environmental welfare effects of each carbon tax policy for each age cohort at the time the policy is adopted. The welfare impacts are measured as the uniform percent change in expected future consumption in each period needed to make the average welfare for a given cohort the same as in the baseline (i.e., no carbon tax) case. Positive numbers represent a welfare increase as a result of the tax policy change and negative numbers represent a welfare decrease.
Figure 2: Total Lifetime Income
Figure displays total annual income for agents of different ages, indexed to 100 for age 20 (y-axis) across ages (x-axis). Total income is hump-shaped over the lifetime (peaking between ages 50 and 60) and falls sharply after retirement.
Note: The figure displays total income for agents of different ages, indexed to 100 for age 20. Total income is income from labor, returns to capital, Social Security, and accidental bequests.
Figure 3: Share of Total Income from Labor, Capital, and Other Sources
Figure displays the average share of total income (y-axis) agents of different ages (x-axis) would receive from labor, capital, and transfers and other sources. As agents approach retirement, capital income becomes an increasing share of the agent's income; after retirement, as agents age and deplete their savings, the share of income from capital steadily declines.
Note: The figure displays the average share of total income agents of different ages would receive from labor, capital, and transfers and other sources (e.g., Social Security).
Figure 4: Energy Budget Share: CEX
Figure displays average energy budget shares (y-axis) by expenditure decile (x-axis) from the 1981-2003 Consumer Expenditures Survey. The average energy budget share falls considerably as average expenditures rise. At the extremes, energy expenditures are over 15 percent of total expenditures for the lowest decile but just over six percent for the highest decile.
Note: Figure displays average energy budget shares by expenditure decile from the 1981-2003 Consumer Expenditures Survey. Energy expenditures include household expenditures on electricity, natural gas, gasoline, and coal and oil in the home. We determine the average energy budget share for each decile conditional on the household’s age. Specifically, we first calculate the average energy budget share for each decile within each age bin. Second, for each decile, we calculate a population weighted average across the age bins where the weights are determined by the share of the population in each bin.