CPLC (Carbon Pricing Leadership Coalition)
Among the key conclusion of the High-Level Commission on Carbon Prices, led by Nobel Laureate Joseph Stiglitz and Lord Nicholas Stern:
"Carbon prices raise revenues in an efficient way, in the sense that they tackle a key market failure, the climate externality. (...)
Recycling revenue to reduce distortionary taxes may, under certain conditions, offer a “double dividend”—by providing both environmental benefits and an aggregate economic gain: taxing “bads” (pollutants) rather than “goods” (labor, capital) can allow for a less costly tax system (Goulder 2013; de Mooij 2000). (...)
Revenues can also be used to reduce the social charges imposed on labor costs. This may reduce unemployment rates and help increase real wages. This would also serve to counteract the potentially regressive effects of higher carbon prices and help poor people deal with the higher price levels caused by carbon pricing. It also has positive distributional impacts because of the larger share of wages in the total income of poor households (higher-income households may have other sources of income—capital, interest, and rents). Moreover, mitigation options (e.g., energy efficiency, renewables, and agricultural and forestry low-carbon practices) are generally more labor-intensive than economic activities based on fossil fuels. Therefore, recycling carbon tax revenues may generate a double dividend: fostering the transition toward decarbonization while simultaneously promoting economic growth and social development (Combet 2013; Grottera, William, and La Rovere 2016; La Rovere et al. 2017; Goulder 1995a)."
CPLC (2017), Report of the High-Level Commission on Carbon Prices.