Road transport carbon pricing creates uneven burdens across Europe and requires targeted revenue recycling

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Abstract
Road transport is a major source of planet-warming emissions, and carbon pricing of fuels is increasingly used to encourage cleaner mobility. Yet higher fuel prices can affect households differently depending on income, location and transport options. Here we show how a forthcoming European carbon price on road fuels could affect households in 23 countries. Using harmonized household budget data adjusted for underreported fuel purchases, we simulate higher petrol and diesel prices and compare burdens across and within income groups. Effects differ strongly across regions. In richer western countries, lower-income households often bear a larger relative burden. In several lower-income eastern countries, the policy appears less burdensome for poorer households, but this often reflects their limited access to private mobility rather than greater fairness. Across countries, households are more exposed when they depend on cars, live in less accessible areas, or lack public transport alternatives. Fair carbon pricing therefore requires targeted revenue recycling and investment in low-carbon mobility options.

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