This climate brief highlights that while there is an acceleration of carbon pricing policy implementation, associated revenues are on the rise (USD 32 billion in 2017). This increase raises the issue of the use of revenues.

I4CE distinguishes between 4 main uses of carbon revenues:
  • Investment in low-carbon projects;
  • Allocation to the general budget;
  • Reduction of other taxes;
  • Direct payment of premiums or subsidies.
Several dimensions must be considered when assessing the relevance of revenue use, and there is no silver bullet for an optimal revenue spending. I4CE shows that to maximize the acceptability and performance of carbon pricing schemes, transparency and discussions are key issues to address.