Background
To achieve the emission targets we have set, in Norway and globally, we must take strong measures to reduce emissions. Households, businesses, and organizations must make small and large changes that reduce dependency on and use of fossil energy. The measures that must be taken are many and varied, the right actions will vary both across sectors and businesses and between different households.
At the same time, we must develop new solutions and new technology that make the transition possible. It is necessary to make many and varied changes in this area as well.
Ensuring that each and every member of society takes the necessary steps both to cut emissions and to develop new technology, carbon pricing, for example through a carbon tax, is a central and necessary tool. If we are to succeed in the transition, we must ensure that all societal actors face incentives to take action. We must also ensure that private investments in technology shift in a greener direction. Carbon pricing precisely ensures this by rewarding those who reduce emissions and by making green investments more profitable.
At the same time, we are facing the challenge of increasing economic inequality. Climate policy will both affect and be affected by this inequality. We need more knowledge on how different tools in climate policy are related to increased inequality, and which policy tools can ensure that we avoid reinforcing this development.
About the project
The goal of the project is to contribute to a better knowledge base for decision-makers who will evaluate different tools in climate policy, and who are also concerned with economic and social inequality.
We will investigate how repayment mechanisms for revenues from climate taxes work, and challenges that may arise from the use of such mechanisms. We will study the effects of funds for repayment to businesses or households, and more specifically we will investigate whether carbon tax refunds can affect businesses' incentives to invest in green technology.
We will also examine the key climate policy tools in the National Budget for 2023.
The project is led by Katinka Holtsmark at the Department of Economics at the University of Oslo and also includes participants from the Institute of Transport Economics.
Duration
May 2021 - December 2024