1. CO₂ price and emissions
You enter a CO₂ price and a benchmark price at which emissions are assumed to have fallen by 95%. The model applies a simple linear relationship between the CO₂ price and the emissions reduction.
EU climate dividend calculator
Explore how revenues from EU-wide CO₂ pricing could be distributed among Member States – including a configurable solidarity mechanism.
A uniform EU-wide CO₂ price is economically efficient, but Member States differ substantially in emissions per capita and income. The question is therefore not only how much revenue carbon pricing generates, but also how this revenue could be distributed fairly across the EU.
This calculator combines an emissions-based allocation with a solidarity component based on population and GDP per capita. The parameters can be changed directly in the workbook.
It is a transparent scenario tool, not a forecast of future emissions or CO₂ prices.
Policy idea: an EU-wide climate dividend with solidarity
The basic idea is to combine a common carbon price with a revenue-sharing mechanism between Member States. Most revenue can be allocated in proportion to national emissions, while a configurable share is redistributed using population and GDP per capita.
Because lower GDP per capita increases a Member State’s weight in the solidarity component, this part of the mechanism can shift revenue towards lower-income Member States without abandoning an EU-wide carbon price.
The tool therefore separates two questions: how strong the common CO₂ price signal should be, and how the resulting revenue should be shared across Member States.
How the calculator works
The workbook uses a small number of editable parameters and then calculates a climate dividend for each EU Member State.
2. Carbon-pricing revenue
The remaining EU emissions are multiplied by the selected CO₂ price to obtain total revenue from carbon pricing.
R = E × CO₂ price
3. Allocation between Member States
A configurable share S is allocated according to each Member State’s share of EU emissions. The remaining revenue forms the solidarity component.
RE = S × R | RP = R − RE
4. Solidarity mechanism and dividend
The solidarity component is distributed using population and GDP per capita. The parameters α and β determine how strongly population and lower GDP per capita affect the weighting. A country’s total allocation is then divided by its population.
wi ∝ Piα × (1 / Ii)β
Data and simplifying assumptions
- Emissions: 2023 CO₂ emissions for the EU Member States from the emissions data included in the workbook.
- Population: Eurostat population on 1 January 2024.
- GDP per capita: Eurostat real GDP per capita for 2024, chain-linked volumes (2020), euro per capita.
- Common emissions response: for simplicity, the calculator assumes the same relative emissions reduction in all Member States. Their shares of EU emissions therefore remain unchanged as the CO₂ price changes.
- Scenario parameters: CO₂ price, the benchmark price for a 95% emissions reduction, the emissions-based revenue share S, and the weighting parameters α and β can all be changed in the highlighted input cells.
The results illustrate the distributional mechanics of the proposed system. They should not be read as a prediction of national emissions, carbon prices or future EU policy.
Use the calculator
Enter your assumptions in the highlighted input cells. The country-level results update automatically.
Smaller screens: swipe or scroll horizontally inside the calculator. The workbook keeps its full width so that input fields, country results and comparisons remain readable.
If the embedded workbook does not load correctly, use the Excel download above.