Public debates on climate strategy tend to focus on carbon pricing. How we spend carbon revenues, however, can be much more important in driving emission reductions. Investing revenues in effective energy efficiency programmes can save seven to nine times more carbon than the price alone. Carbon revenues, therefore, are a key source of funding for the clean energy transition, as they can accelerate decarbonisation at lower cost to the consumer.

Louise Sunderland presents a case study of the Czech Republic and its successful programme for recycling carbon revenues from the European Union’s Emissions Trading System. Ten years of dedicating carbon revenues to energy efficiency and renewable energy programmes generated proven carbon reductions and positive returns to the economy. Other countries can draw on the Czech experience for lessons learned about programme design, the uptake of funding, methods for improving effectiveness, and strategies for building public awareness and confidence.