Carbon Tax and Dividend

• January 4, 2021 - Leo Rampen

A carbon tax is the best way to stimulate green technology. Unfortunately it’s unlikely to be popular as it is necessarily regressive - it will impact the poorest hardest. In the current political climate no politician will touch it. To win votes, energy prices need to go down, not up.

But what if, instead of just collecting that tax, we redistribute it evenly. If the increased price of fuel is offset by a monthly dividend to every household, suddenly our regressive elitist tax becomes a popularist one. Most people will be receiving more money than they pay.