Despite the fact that poorer people generally have lower emissions, taxes on the carbon dioxide (CO₂) our activities emit tend to affect people on low incomes more than richer people. Having less money means you can ill afford a switch to an untaxed alternative, like an electric car, or pay for carbon-saving measures like home insulation. You are also more likely to struggle to use less of an essential good like petrol or gas for heating, even if the price goes up.
Carbon taxes on energy that people use in their homes – for heating, cooking or watching TV – charge consumers for the emissions per kilowatt-hour (kWh) of electricity, gas or oil used. Economists would say that these kinds of carbon taxes are regressive, because using energy to heat and power your home is a necessity and poorer people will use a much higher share of their income to pay for these things – and the taxes – than richer people.
