Economic policies required to reduce carbon dioxide emissions are examined in this book, with the likely impact of environment taxes on income distribution explored. A tax on domestic fuel and power and a carbon tax is considered as the authors present for consideration a system that would be fair to all members of society. This theory is analysed, offering the direct and indirect effects of such a tax on a population. The welfare effects are also estimated for a variety of income groups. The inequalities and social welfare measurements are evaluated as the authors consider whether these distribution effects can be overcome by adjusting transfer payments to compensate lower income groups. This study examines environmental taxes in Australia with methods that could be applied in other countries.
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