Internalizing Externalities : An Exploration of Equitable Distribution of Carbon Pricing Revenue
Roberts, Annika Leigh
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Global climate change is the problem of our generation, and if we fail to act on it now, it may be too late. The issue is being fueled by the unfettered emission of carbon dioxide into our air by an economy built on fossil fuels and their free pollution of CO2 into our shared atmosphere. Placing a tax on those emission, effectively making it more costly to pollute, is one way proposed to slow down the onslaught of climate change. The issue with such a carbon tax is it's inherently regressive nature. The question this paper raises in response to that regressiveness is: What is the most just, equitable way to manage a carbon price and how can the revenue raised by a carbon price be best used to mitigate the most harm? Taking a narrative route through the exploration of this question and its many answers, this paper works towards a multifaceted solution to a carbon tax's regressivity. Through personal experience and an exploration of literature, this essay examines the nuances of distributing a carbon tax's revenue in the way that causes the least amount of harm and pursues the most amount of justice. It begins with an understanding of utilizing a rebate check to mediate a carbon tax's regressiveness, then problematizes this potentially overly simplistic model, and then concludes somewhere in the middle. Essentially, it is established that the role of the dividend is to provide the financial means for people to make critical choices about their energy use and lifestyles while other allocation of revenue should be concerned with opening up the accessibility of those choices.