Assessing the distributional consequences of the transition in the EU

Implementing the Fit-for-55 package would increase the cost of energy (and related equipment) relative to the baseline, with regressive effects in the absence of redistribution. Pairing the output from the JRC-GEM-E3 model, which takes inputs on the transition of key sectors from PRIMES, with detailed microdata from the European Household Budget Survey (HBS) evidences these regressive effects. It also shows a progressive effect can be achieved by a lump sum transfer using (a fraction of) the additional revenue from the package’s expanded carbon pricing, especially when this is targeted to households at risk of poverty.

WEITZEL Matthias; 

2025-07-15

The Coalition of Finance Ministers for Climate Action

JRC143098

https://greenandresilienteconomics.org/compendium-of-practice/contributions/assessing-the-distributional-consequences-of-the-transition-in-the-eu/,    https://greenandresilienteconomics.org/wp-content/uploads/2025/06/Assessing_the_distributional_consequences_of_the_transition_in_the_EU.pdf,    https://publications.jrc.ec.europa.eu/repository/handle/JRC143098,