This study looks at the possible impacts of a carbon tax and dividend scheme upon incomes across society.
In its simplest formulation, such a scheme taxes individuals according to their carbon consumption and pays out the revenue to all individuals within a defined geography. It is comparable to a form of Universal Basic Income, funded by carbon taxes.
This study models such a scheme at three different scales: Global, European and the nation state.
A global scheme, if tuned properly, would effectively end extreme poverty globally and would also serve to lift more than a billion people above more ambitious poverty lines of $3.2 and $5.5 a day. 3.8bn people would see their income increase by at least 10% with a global carbon dividend scheme.
A carbon tax + dividend scheme limited to Europe would most benefit Bulgaria, Croatia and Romania, but would also significantly benefit the poor (lower income deciles) in most European countries.
In the UK and Germany, national carbon dividend schemes would benefit 70% of the respective populations, who would receive net contributions from the top 30% of the population – with the majority of contributions coming from the top 1%.