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Despite the consensus that green taxation is an effective way to accelerate the decarbonization of economies, few countries are implementing ambitious tax reforms. This is the case of diesel for transport in Spain. The arguments against boosting the diesel tax stressed its potential adverse effects on the economy and society, accusing it of being a regressive policy. In this paper, we shed light on the distributional impact of raising the excise tax on diesel to the same level as on gasoline for final consumers in Spain and various compensation schemes jointly designed with several stakeholders. The results confirm that raising the diesel tax without offsets would have slightly regressive effects and that rural and middle-income households would bear the brunt of the increase. However, the effects become progressive when the co-designed offsetting schemes are implemented. These findings may help decision-makers in achieving a just, acceptable, and politically viable energy transition. © 2023 The Authors This work was supported by the European Climate Foundation [ G-2010-60985 ]; the Basque Government through the BERC 2022-2025 program and the BIDERATU project [ KK-2021/00050 , ELKARTEK programme 2021]; the María de Maeztu Excellence Unit 2023-2027 [Ref. CEX2021-001201-M], funded by MCIN / AEI / 10.13039/501100011033 ; the Ministry of Science, Innovation and Universities of Spain [ RTI2018-093352-B-I00] and [ RTI2018-099858-A-I00 ]; and the European Union's H2020 project LOCOMOTION [No. 821105 ]. Xaquín García-Muros also acknowledges financial support from the European Union's H2020 -MSCA–IF–2017 Actions [No. 796650 ] (CHANCE project). Finally, the authors thank the representatives of the stakeholders for their participation in the study. |
