Socially Balanced CO2 Pricing in the Transport and Building Sectors

Abstract

Ambitious CO2 pricing via emissions trading is a key lever for achieving the statutory climate targets in the building and transport sectors. This makes climate protection measures economical, ensures target achievement through a binding upper limit on emissions and helps to keep the economic costs of climate protection low. However, it must be ensured that no social hardship arises. This paper by the German Environment Agency (UBA) shows how this is possible. In essence, the UBA proposes redistributing the revenues from national emissions trading (nEHS) to citizens via a climate dividend and supplementary support programs to reduce fossil energy needs for vulnerable households. Figure 1 below illustrates the main elements of the concept. The present paper is the abridged version of the UBA study “CO2 pricing in the transport and building sector in a socially responsible manner. “