Frequently Asked Questions

Q:   What is climate income?

 A:  Climate Income is a simple, fair and effective solution to most of the climate crisis. Putting a price on pollution reduces the problem and sharing the money to all citizens means everyone can afford the extra costs.

Q:   Is climate income effective?

 A:  Yes! Thousands of economists, among them 27 Nobel laureates, have stated that “a carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary”, continuing “all revenues should be returned directly to citizens… to maximize fairness and political viability” (source).  This is the largest public statement of economists in history.

Q:   Has it been tested?

 A:  Yes! Carbon pricing has been tested world wide (source) and it works (source). The revenues are used in different ways in different countries. Returning the revenues to citizens has been tested in Canada and Switzerland.

Q:   Where can I find more information about climate income in Canada and Switzerland?

 A:  If you are interested how climate income works, we suggest watching the Financial Times video Here's what a carbon tax could mean for you. And this news feature from the canadian public service shows how it works in Canada. The site Our world in data goes more into depth of carbon pricing and the policies in Switzerland and Canada.

Q:   Will the impact be big enough?

 A:  It all depends on how high we set the fee on fossil fuels. If the fee is too low, the impact will be low. Set it high, and you get a very strong financial drive to a cleaner economy. So by setting a starting price and predictably increasing it annually, we gradually build an effective impact.

Q:   Will the imposed fee raise prices?

 A:  Probably. Many companies will try to push the carbon fee onto customers by raising their prices. However the incentive is there for innovation for less polluting, carbon free options, meaning lower prices for people in the long term. The price increases are also compensated for by the monthly Climate Income.  (source1, source2)

Q:   Why will low and middle income households benefit?

 A:  People with lower and middle incomes consume and pollute much less, so they will feel the price rise of polluting goods less, while receiving the same monthly climate income. Because of this low and middle incomes see a net benefit (source). Indirectly this money comes from big polluters and those with higher incomes paying a fair price for the pollution they cause.

Q:   What about the risk of increased consumerism (the “rebound effect”)?

 A:  We do not see that the policy will cause significant decreases or increases of the overall consumption in society. But the consumption will definitely move towards products and services that are better for the climate. Carbon intensive products and services will be more expensive, so they will be consumed less.

Q:   Don't we need other government actions?

 A:  Yes, we also need government actions on adaptation, education, research and infrastructure. And a Climate Income is fully compatible with all of these - it's a win/win solution. A Climate Income simply creates a strong, market-based incentive to reduce emissions, and it goes hand in hand with all other actions.

Q:   Do we need carbon pricing? Aren’t green stimulus-packages enough?

 A:  This question has recently been studied by the International Monetary Fund (IMF) (source). They are proposing both green stimulus packages and a rising carbon tax. Despite the huge stimulus packages in their model they are estimating that 80% of the emission reductions are achieved by the carbon tax. So yes, carbon pricing is still needed.

Q:   Does this solution cover all emission sectors?

 A:  What's great is that a Climate Income can cover all different pollution sectors. If we impose a fee per tonne of emissions, it creates an equal financial pressure on each tonne evenly. We can cover fossil fuels, and also industrial and agricultural pollution. This way, every sector that causes emissions can be covered in a fair way.

Q:   What about nuclear power?

 A:  Carbon pricing is an effective economic policy that removes harmful greenhouse gas emissions from the economy, we take no formal position for or against any particular technology, including nuclear power. We specifically want the global economy to remove harmful emissions in the most cost effective manner possible.

Q:   What responses do you get from politicians?

 A:  The consensus is moving towards seeing the transition as an opportunity to create jobs and a thriving economy. This is a shift, for a few years ago the energy transition was often seen as a sacrifice. Most politicians we meet are now on the lookout for more effective climate policies and find this policy interesting.

Q:   How are you going to get this proposal through?

 A:  With your help.

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