Mitigation of the climate crisis can be married with social equity. Numerous and widely accepted concepts for a sound climate policy framework for Germany with a focus on private households combine climate protection and social cohesion, with net financial benefits for low-income households. Carbon pricing schemes give a striking example. They make carbon emissions more expensive and hence provide market-based steering effects towards a low-carbon economy. Although higher prices can burden consumers, the additional fiscal revenues generated through the carbon pricing can be used to pay a per-capita climate bonus to all citizens. This per-capita compensation would result in net benefits for the lower social strata, while preserving the envisioned ecological steering effects. Additionally, the government can reform other fiscal expenses, promote climate-friendly alternatives, and support supplementary social measures. Carbon pricing, as an element of a broad mix of instruments in climate policy, has been subject to intense scientific debate and is hence well-researched. A large body of scientific evidence suggests that carbon pricing can be socially balanced and is long overdue to tackle the climate crisis.
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Gründinger, W., Bendlin, L., Creutzig, F., Hagedorn, G., Kemfert, C., Neumärker, B., Praetorius, B., & Tvrtković, M. (2021). CO2-Bepreisung und soziale Ungleichheit in Deutschland. Momentum Quarterly: Zeitschrift für sozialen Fortschritt, 10(3), 176-187. doi:10.15203/momentumquarterly.vol10.no3.p176-187.
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