“We face two interlocking crises today: accelerating climate change and worsening social injustice. The only measure that addresses both simultaneously is a Carbon Tax Dividend: a fee levied on all fossil fuels, with most or all of the proceeds distributed as a dividend to all citizens on a strict per capita basis. In my view, this is a precondition of achieving any kind of just transition.”
Putting a price on pollution makes economic sense, including to climate sceptics, and people like the idea of a regular ‘carbon dividend’ going into their bank account.
Professor Cameron Hepburn, Professor of Environmental Economics at the University of Oxford.
Placing a price on carbon creates the incentive for emissions to be reduced in a cost effective and technology-neutral way, while mobilising the private sector to invest in emissions reduction technologies and measures.
While we recognise the merits of a Carbon Fee and Dividend policy, we do not propose to adopt it at this time.
UK Government (2020 report, page 39)