Abstract

Empirical evidence suggests that women, on average, have stronger preferences for green consumption, and are employed in less carbon-intensive sectors, when compared with men. The present paper exploits this heterogeneity to study the distributive effects of climate policy between men and women. The analyses rely on numerical experiments within an environmental dynamic stochastic general equilibrium (E-DSGE) model in which men and women differ in their preferences over carbon-intense goods, and in their comparative advantage across sectors. Calibrating the model to the French economy, we find that climate policies, such as a carbon tax, or a subsidy for the labor cost of green firms, can reduce gender-indexed income inequality. Productivity improvements in the green sector can also reduce this inequality.