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Section Issue Brief
Title Putting a Price on Carbon: Ensuring Equity
Author Noah Kaufman & Eleanor Krause
Date Apr 01, 2016

Putting a Price on Carbon: Ensuring Equity

Authors: Noah Kaufman & Eleanor Krause


A price on carbon?in the form of either acarbon tax or a cap-and-trade program?can play an important role in mitigatingthe risks of climate change. In this issue brief, we describe the variationacross U.S. households in the effects of a carbon pricing policy. The mostinfluential factor determining the variation across regions and socioeconomicgroups is the use of the revenue generated by payments of the carbon price,variation that is entirely in the hands of policy designers. We show howrevenues can be used to address regional disparities and ensure that unfairburdens are not imposed on households that cannot afford them. By using just asmall portion of carbon pricing revenue to specifically target low-incomehouseholds and coal communities, policy designers can ensure that these groupsare better off under a carbon price than alternative policy pathways.

* See attached for full paper