Energy Policy Group launched the “Distributive Impact of Carbon Taxation in Central and Eastern Europe” project on Friday, funded by the German Ministry of Environment, Nature Conservation and Nuclear Safety.
Along with the Romanian association, the project also involves organizations from Poland, Hungary, Bulgaria and Germany, which carry out this impact assessment in the 4 Central and Eastern European countries, compared to Germany.
The role of the project is to study the effects of rising carbon costs in the EU on economically vulnerable groups in final energy consumers.
The project focuses on the four countries because they depend on fossil fuels more than the EU average, while also having higher levels of energy poverty than other countries.
According to the Energy Policy Group, the project will develop a research methodology that combines a quantitative assessment of the impact of carbon taxation with a microsimulation based on figures from household budget surveys.
The redistributive channels examined in this project are price developments, changing consumer behavior and the impact on the labor market – especially in high carbon sectors.
During the launch conference of the project, the senior data analyst of Energy Policy Group, Constantin Postoiu, showed that carbon taxation would have a very big impact on the Romanian population.
“In Romania there is no form of carbon taxation except ETS (carbon emissions certificates). Before the covid crisis, almost a quarter of the population was considered in energy poverty. Unfortunately, at the institutional level there is very little understanding towards the impact that carbon tax has on population. More than half of the entire population uses natural gas for heating or is connected to the heating distribution system that burns fossil fuels. When we talk about fuel used for cooking, the percentages are even higher. So the direct impact would be very high, at least on the Romanian population, and these are just the direct effects. But carbon taxation would have major indirect effects on all sectors of the economy,” said Constantion Postoiu.
The Energy Policy Group analyst pointed out that it took 3 months to obtain data from household budget surveys.
“The project sets a very high standard for the methodology and data used. These are top methods for assessing the impact of taxation, but the project is also based on data from household budget surveys, which is a very comprehensive set of information, representative for each country,” said the Energy Policy Group representative.