In an attempt to ensure decision-makers prevent regressive impacts of climate action and reduce existing inequality, Bouye, Grinspan and Tankou of the World Resources Institute outline 5 priorities in achieving the “just transition”.
The list contains two important fiscal considerations: giving low-income household access to cheaper green services and products and designing progressive green tax reforms.
The former focuses on the fact that greener products are not necessarily cheaper for consumers and that green technologies can come with higher up-front costs. Thus, it is necessary to devise strategies that offer tailored incentives to low-income households.
The latter point underscores the fact that fossil fuel subsidy removals and carbon pricing, introduced without offsetting measures, can be regressive because they increase energy and transportation prices, which represent a larger share of expenditure for low-income households. Therefore, appropriate rebate mechanisms or tax revenue earmarking should be used to overhaul entrenched inequalities.
To read about these priorities in more detail, refer to the original article on the WRI website.