Who pays for carbon pricing?
Income redistribution, welfare losses and social welfare are rising keywords in the economics journals, and carbon taxes and emissions trading are large topics. Yet only 34 of 422 recent carbon-pricing papers carry a distributional or household keyword. As carbon prices reach heating and transport fuels, who bears the cost, and does returning the revenue make it fair?
What prompted this
In economics, "income redistribution" (7 papers in July–September 2026 against about 2 expected), "welfare loss" (10 against 5) and "social welfare" (20 against 12) are growing (see the economics dashboard). Since October 2025, 422 papers carry a carbon-tax, carbon-pricing or emissions-trading keyword (260 in economics journals, 80 in finance, 46 in operations research). Only 34 of them carry a distribution, household, inequality, regressivity or redistribution keyword, and "revenue recycling" appears on 12.
Questions
- How regressive are carbon prices on heating and motor fuel, across income groups and between cities and the countryside?
- Which ways of returning the revenue (equal dividends, lower income taxes, targeted transfers) leave most households better off?
- Does visible compensation raise public support for higher carbon prices?
Data that could help
Household expenditure surveys, energy use by fuel, carbon price schedules (including the EU's new emissions trading for buildings and road transport), and survey experiments on public support.
Next step
Compute the cost of a given carbon price for each income decile from a national household expenditure survey, with and without an equal per-person dividend.