Against the backdrop of exploding energy prices, warnings of the regressivity of increasing carbon prices have become louder, and proposals for remedies more sophisticated.
Hence, low-income households are also disproportionately affected by a carbon price increase. The EU has already acknowledged this fact and, as a first response measure, proposed the Climate Social Fund in its Fit-for-55 package. 25% of the revenues from the planned EU ETS 2 are supposed to feed the fund, which, according to EU estimates, will provide EU Member States with approximately €53 billion over the period 2027 and 2032. Member states are supposed to develop Climate Social Plans, which outline their spending strategy for alleviating energy and mobility poverty.