A new study from the Potsdam Institute analyzed 1.7 million households across 88 countries to see who actually bears the cost of carbon pricing. The research found that the gap in costs between households with similar incomes is far larger than the gap between rich and poor. Vehicle ownership, location, and energy source matter more than income level in determining who pays. Policymakers often design compensation based on income brackets, but this study suggests that approach misses most of the variation. Two families earning the same amount can face very different carbon costs depending on whether they drive, what fuel they cook with, and where they live. The authors argue that tailored policies, like cleaner stoves or better public transit, could be more effective than blanket rebates.
