The professor advocates for increased taxation on high earners due to climate concerns

Professor Matti Liski suggests that progressive income taxation could be used to equalize the cost of climate action for different income categories. He emphasizes the role of income taxation and income transfers in addressing economic disparities in climate policy. As society transitions towards a carbon-free environment, the financial burden on taxpayers increases, especially impacting low-income individuals more significantly. The challenge lies in ensuring equitable distribution of increased costs among income groups, such as the rise in fuel prices affecting lower-income drivers disproportionately.

Emission reduction targets necessitate higher taxation on fuel, housing, and energy, posing financial challenges for citizens. Liski proposes integrating income transfers that offset climate action costs into overall taxation processes. This approach involves recording emission-related expenditures on tax returns and providing refunds to low-income earners while imposing higher costs on high-income individuals. The goal is to promote environmental consciousness among wealthier individuals and encourage energy-efficient choices.

Liski acknowledges the complexities of implementing his proposal, anticipating potential drawbacks like discouraging work due to high tax burdens. Nevertheless, he underscores the importance of balancing costs associated with climate change and fostering an environmentally sustainable society. By leveraging income-based refunds and tax adjustments, Liski seeks to mobilize resources effectively and boost eco-friendly initiatives. This inclusive strategy aims to engage citizens from all income brackets in climate action and reshape consumption patterns for a greener future.