Distributional Consequences of Becoming Climate-Neutral

Thu, 01 Jan 2026 00:00:00 +0000

This paper investigates how the EU’s Fit-for-55 climate package will affect aggregate output and distribute its costs across the income distribution. The question matters because energy is a necessity good — poorer households devote a larger share of spending to energy — so policies that raise energy prices are regressive in their first-order incidence. Despite a large literature on the aggregate macroeconomics of the green transition, distributional consequences have received limited attention.

Philipp Hochmuth | Macro Paper Warehouse

Distributional Consequences of Becoming Climate-Neutral