Combining climate policy instruments for a just transition to a climate-neutral economy

Nature Climate Change, Published online: 15 October 2026; doi:10.1038/s41558-026-02757-zA distributional analysis of European Union climate policy pathways traces the costs of reducing carbon dioxide emissions to the level of households based on their spending and income patterns. We find that different equity considerations, including income inequality and within-group impact divergence, can shape optimal climate policy design with carbon prices, transfers, standards and subsidies.