University of Leeds researchers said that providing these services for free could significantly reduce home energy emissions and motor fuel emissions.
Carbon taxes on home energy and motor fuel often place a greater burden on low-income households because the same tax rate applies to every taxpayer, regardless of income. However, they contribute much less to climate change than high-income households.
The researchers compared two ways of using revenue from carbon taxes to reduce emissions and fuel and transport poverty. They found that providing free green services would be more effective than redistributing the tax revenue among the population to address the regressive impacts of the taxes on lower earners.
“Stringent climate policies, including carbon taxes on home energy and motor fuels, are likely to be part of government strategies to achieve climate targets, but they put higher burdens on low-income households than on rich households,” said study...