Citizens of countries that rebate carbon taxes aren’t aware of the rebate

Carbon tax isometric vector concept.

Enlarge / Carbon tax isometric vector concept. (credit: Getty Images)

One of the simplest ways to reduce carbon emissions is to put a price on them, gradually ratcheting up the price to induce conversation and emissions-free technologies. In turn, the simplest way of imposing that price is by taxing emissions. But taxes are typically unpopular, as people are very sensitive to the cash they extract.

A rebate plan alongside carbon taxes makes those taxes less painful. Rather than putting the tax’s income into the national budget, the revenue is divided up and returned to citizens. The division is often done on a per-capita basis, which turns out to be progressive, since lower-income individuals tend to end up producing fewer carbon emissions but get an equal share of the rebate.

While a rebate sounds great on paper, only a couple of countries have actually tried it. A new study looks at these countries more carefully and finds that most citizens underestimate the rebate they get, and opinions on the taxes have become politicized.

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