Using revenues from a carbon tax to provide free green electricity and transport would reduce carbon emissions much more strongly—and more fairly—than a carbon tax alone or cash rebates to the public, says a new study that is part of a growing body of research exploring how to implement carbon taxes equitably. Researchers analyzed spending by more than 275,000 households across 27 European countries, using a computer model to estimate household greenhouse gas emissions for different categories of expenditure. Then, they modeled how a carbon tax of 80 Euros per ton of carbon dioxide and various compensation policies would affect people’s spending, carbon emissions, and ability to afford basic necessities.

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