Macroeconomic Price Effects of the Return of CO,Tax Revenues

Taxation of CO₂ emissions is expected to exert a strong upward effect on aggregate price development. Therefore, the envisaged return of CO₂ revenues to private households should be implemented in a way that neutralises the increase of HCPI. This serves to avoid excessive secondary reactions from wage development, price setting and monetary policy, as seen in the wake of the energy crisis, and to ensure an employment-oriented macroeconomic policy with price stability.