Who is most affected by carbon tax? Evidence from Chinese residents in the context of aging

Previous research on the distributional effects of carbon tax has primarily focused on different income groups, with less examination of different age groups. Nevertheless, significant differences in the effect of carbon tax are expected for different age groups, particularly for the vulnerable elderly. Based on detailed data regarding the consumption patterns, this study first investigates direct and indirect emissions for different age groups of residents. And then we analyze the distributional effects of carbon tax on residents of different ages and income groups using an input–output price model. The results show that the indirect carbon payment burden rate on the elderly (i.e., the proportion of carbon tax expenditure in total expenditure) is 1.2 times that of the general population. The combined impact of income and age on comprehensive indirect carbon payment rates is estimated to be 1.4 times that of the general people, showing that the carbon tax exacerbates the energy poverty of low-income seniors to a greater extent. In addition, supportive measures can effectively reduce the carbon tax cost burden of the elderly and low-income residents. Even if the carbon tax is levied more vigorously, it can still enhance the ability of vulnerable groups to overcome negative energy shocks.