Equity Impacts of Environmental Policy

This article surveys recent literature on the equity impacts of environmental policy. We focus on studies that look at the distribution of costs and benefits of alternative environmental policies. We also examine potentially important trade-offs between efficiency and equity that arise in the context of environmental policy, as well as transition effects. In many of the applications surveyed here, environmental policies can be regressive. Strategies are discussed to reduce this regressivity through the use of revenues from certain policy instruments. With regard to the distribution of the benefits of environmental policy, we conclude that there is a need for more spatially disaggregated studies that simultaneously capture the spatial and socioeconomic impacts of environmental policy.