COP27 proposes to study a green tax reform for reaching climate goals without imposing disproportional burden on the most disadvantaged members of society. How should the general income tax progressivity be altered when climate policies are introduced? Should high-income individuals face stricter incentives to reduce emissions? Should climate policies change government transfers such as child allowances or unemployment benefits? COP27 answers these questions by using mechanism design, and individual-level administrative data combined with a survey to quantify what social and demographic groups are the most vulnerable and responsive to climate policies, and how the adverse distributional effects can be compensated.

2023

2027