Who bears the brunt? Distributional effects of climate change mitigation policies

Abstract

Climate change scholars generally urge that CO2 emissions need to be cut rapidly if we are to avoid dangerous risks of climate change. However, climate change mitigation policies are widely perceived to have regressive effects — that is, putting a higher financial burden as a proportion of household income on poor than on rich households. This is one of several major barriers to the adoption of effective mitigation policies. They would also have considerable social justice implications requiring significant welfare state responses. We assess the claim that climate change policies have regressive effects by comparing different types of mitigation policies. We will argue that many of these are indeed likely to have regressive distributional implications but that there are several policy options to counteract regressive effects.