Green taxes and charges: reducing their impact on low-income households

Environmental or 'green' taxes and charges send signals to consumers by making consumption of environmental resources more expensive. However, there are concerns that their effect could be 'regressive', by hitting lower income households disproportionately. This research, by Paul Ekins and Simon Dresner of the Policy Studies Institute, investigated the possible impact on low-income households in four areas of environmental and social importance: domestic use of energy, water and transport, and domestic generation of waste. It also considered whether any negative impacts could be reduced if the tax or charge were designed appropriately, or if a compensation scheme were introduced.