Who bears the burden of greening electricity?

Faced with the threat of climate change many countries are promoting renewable energies to decarbonize their energy system. A common policy foster electricity from sources feed-in tariffs which financed by surcharges on prices. Higher prices in turn raise concerns regressive distributional impacts. In this paper, we investigate impacts three alternative policies subsidize production Spain: (i) exemptions surcharge for residential consumers, (ii) an increase mineral oil taxes, and (iii) value-added taxes. We find that all options can attenuate effects compared tariffs. For our quantitative impact assessment, couple a microsimulation model computable general equilibrium capture incidence heterogeneous households economy-wide framework. • subsidizing RES-E support Spain. model. Alternative could have attenuated promotion. Our analysis warrants caution against use surcharges.