CO2 pricing pushes social inequality especially through heating costs, needs compensation – analysis

The energy transition is placing an uneven financial burden on Germany‘s poorest households – and transition costs related to heating are impacting these citizens much more than in other sectors such as transport, an analysis by the Kiel Institute for the World Economy (IfW) has found. “The decarbonisation of the German economy comes with significant disruptions. These often disproportionately affect low-income households, as they cannot afford to make the adaptations needed in areas particularly affected by price rises,” the IfW said.