UBI Center is a think tank whose mission is “To make universal basic income the world’s most thoroughly researched economic policy“. They have just published (23rd April) a blog discussing their analysis of carbon pricing with dividends in the UK and the results won’t surprise anyone in CCL. They start by pointing out that the recent IPCC report on mitigation of climate change mentions carbon pricing 680 times, more than any other single policy but they also point out that carbon prices impact the least well off more than better off families. And that brings them, inevitably, to the concept of a universal dividend.
For me, their key result is the plot I’ve borrowed from them below. It shows how poverty is substantially reduced by carbon-pricing plus a universal dividend. At a price of £100/tonne CO2, for example, poverty falls by over 12%. The UBI-center blog concludes “Experts agree that carbon dividends would help avert climate change and deaths from air pollution, and, like other poverty researchers, we’ve found that they would reduce poverty and inequality as well“. I think everyone in CCL will be delighted by that strong endorsement of Climate Income.
I’ve been looking at similar issues myself to try and understand better how Climate Income could help in the current cost-of-living crisis. I was considering the impact on Fuel Poverty in particular (defined as home energy costs exceeding 10% of disposable income) rather than overall poverty (defined as income below 60% of the median). However, I’ve redone my numbers using overall poverty and get results that are a little smaller than UBI-center’s more sophisticated approach. I’m in touch with them now to see if we can get to the bottom of the remaining discrepancy so that we can both have more confidence in the results we’re getting.