Carbon taxes that focus on luxury consumption are fairer than those that tax all emissions equally

Not all carbon emissions are made for the same reason — they range from more essential purposes like heating a home to nonessential ‘luxury’ activities like leisure travel. However, proposals for the implementations of carbon taxes tend to apply to all emissions at an equal rate. This can give rise to and exacerbate inequalities. A new analysis suggests taxing luxury carbon emissions at a higher rate instead; if all 88 countries analyzed in this study adopted the luxury-focused policy, this would achieve 75% of the emissions reduction needed to reach the Paris Agreement’s goal of limiting climate change to well below 2°C by 2050.