The costs of pollution are rarely distributed equally — they are often felt most strongly by marginalized and underserved communities. In the United States, for example, low-income households and racial and ethnic minorities have a disproportionately high exposure to particulate pollution from point sources such as refineries and power plants. The concept of environmental justice calls for the removal of these disparities.

Climate change creates disproportionately greater social, economic and health impacts on underprivileged groups. As UN Secretary-General António Guterres said, “Climate change is happening now and to all of us. No country or community is immune, and, as is always the case, the poor and vulnerable are the first to suffer and the worst hit.”

As we tackle the climate crisis, we must strive for environmental and climate justice. This means that our solutions must not only solve climate change but must address these disparities. Solutions must not create new issues for the poor and vulnerable and should correct inequities.

Carbon pricing is an important strategy for reducing planet-warming emissions. It involves a fee or tax on fossil fuel pollution to reflect its true cost to society. The resulting higher prices for fossil fuels encourage businesses and consumers to transition to lower-polluting products and services like higher-efficiency appliances, renewable energy and clean transportation.

Carbon pricing, however, is sometimes criticized as being inequitable due to concerns about the economic impact on low-income households that don’t have the resources to access efficient appliances, electric vehicles and other low-carbon solutions. These households would be left to deal with higher energy costs.

But there is a simple policy that avoids this equity concern: carbon cashback. This approach is used today in Switzerland, Austria and much of Canada. It involves returning the tax revenue proceeds directly to the people in equal shares as a rebate. Because lower-income households tend to purchase fewer goods and services than higher-income households, they would pay less, on average, in carbon fees. But since everybody would receive the same rebate, lower-income families, on average, would receive greater net financial benefits than others. This allows carbon pricing to be progressive.

Carbon cashback has been studied in depth, specifically for Hawaii. In 2021, the University of Hawaii Economic Research Organization completed a study commissioned by the state Legislature and found that a carbon fee equivalent to about 45 cents per gallon of gasoline would reduce carbon emissions in the state by about 10%.

In addition, if the revenues are returned to households in equal shares, most families in the state would come out ahead financially, and most lower-income families would come out way ahead. The poorest 20% of households in the state would receive a net financial benefit of about $900 per year, on average, in the early years of the program. Based on these and other findings, the 2020-2022 Hawaii Tax Review Commission made carbon cashback its top recommendation for tax reform.

Carbon cashback alone cannot eliminate all the disparities among social groups when it comes to the impacts of fossil fuel consumption and climate change. Traditional regulatory mechanisms are needed, for example, to eliminate particulate pollution hot spots near disadvantaged neighborhoods. But carbon cashback can help ensure that vulnerable communities are not left behind as we transition to a carbon-free economy.

The state Legislature will have an opportunity to pass carbon cashback legislation in 2024. Hopefully, our lawmakers will see that this can enable not only a more timely transition to a resilient clean energy future, but one that is just.

Helen Cox, former chancellor of Kauai Community College, chairs the Kauai Climate Action Coalition and co-leads the Kauai chapter of the Citizens Climate Lobby; Matthew Geyer of Oahu is a founding member of Hawaii Environmental Change Agents; Noel Morin of Hawaii island is a sustainability, climate and resilience advocate.