Dr. Pete Lunn:

The answer to that question is "Yes". My team is working on a few specific projects, but one in particular relates to perceived fairness and the redistributive element of that perceived fairness. Examples of that would be progressive carbon taxation. I am not suggesting what I am about to say is a good idea; I am just giving it as an example and the committee might think it is a good idea or not. Progressive carbon taxation is something like allowing people to have one flight a year that is tax free, but those taking a second flight in the year will get hit with a tax. For a third flight, that tax becomes higher. That is a way of having a progressive carbon tax that more strongly hits the people who are polluting the most and tries to change the distributive element of carbon taxation which understandably people are nervous about because elements of carbon taxation will hit the least well off harder. We potentially want a more progressive taxation.

We are establishing a research programme to study these issues and see what people would regard as distributionally fair, given not only the distribution of income but also, as the Senator rightly said, the distribution of emissions and the interaction between the two. Can we come up with systems that people instinctively think are fairer than other systems? If we can, that would be a useful thing to inform policy. The bottom line is that we are doing it, but we have only just started.