Carbon pricing: how best to use the revenue? (Grantham Research Institute)

Carbon pricing can encourage reductions in emissions and innovations in low-carbon technologies, while raising considerable amounts of revenue for governments. This in turn raises a crucial question: how should these new revenues be spent? This Policy Brief examines arguments for the three main classes of spending proposals and discusses the merits of formal earmarking or ‘hypothecation’ of revenues. This Brief is available to download from the website of the Grantham Research Institute.