Abstract
Existing research on the equity impact of climate policies tends to focus on inequalities across income levels and neglect inequalities between households living in different locations. This column analyses how a simple fuel tax might impact households in Cape Town, South Africa of different levels of income, but also living in different types of housing and locations within the city. Low-income households and households living in the periphery are most affected by the tax in the short term, but are more likely to adapt in the medium run by switching transportation modes and employment centres. However, the authors find persisting inequalities generated by the fuel tax in the long run.
Publication
CEPR