1. Targeting Poor Households? Distributional Aspects of Energy and Environmental Taxes in Cyprus Panos Pashardes Economics Research Centre, University of Cyprus 6 th June 2014

2. Introduction Who pays current green taxes – distribution of average green tax rates Who will be paying additional green taxes – distribution of marginal green tax rates Unfair features of green Taxes Effectiveness of green Taxes Policy conclusions

3. Shares in expenditure

4. Distributional effects of the EU Energy and Climate Policy Package % increase in cost of living

5. Block pricing: an unfair feature of green taxes

6. Effectiveness of Green Taxes Price Elasticity and its Components

7. Conclusions Green taxes in Cyprus are regressive Also, may not be effective, particularly in the short-run Measures to promote equity – Water-Electricity : reform block pricing to allow for household size – Petrol: use revenue from green taxes to improve public transport services Measures to promote effectiveness – exploit the revenue potential (low price elasticity) of green taxes to fund the expansion of green services