Toon Vandyck – Enhancing fairness in climate action through policy packages

Room : P30

Achieving a fair transition to climate neutrality requires a careful balancing of policy options. Here, we quantitatively evaluate the equity implications of different EU climate policy packages, considering pricing, regulation via standards, subsidies, and transfers. Leveraging a modelling framework that combines energy, economy-wide, and household-level modelling, we show that standards limit impact variability within income groups, while carbon pricing with transfer-based revenue recycling offsets regressive impacts between income groups. Simplistic policy implementation with a limited number of instruments therefore gives rise to a trade-off between horizontal and vertical equity, represented as within- and between-group impact