Rationing complements existing market-based regimes and efficiency standards. While carbon taxes and similar price-based mechanisms have achieved some reductions in emissions, they are set up to allow individuals with high incomes to continue problematic consumption patterns by paying a premium. By placing a ceiling on high-impact luxury consumption, the policy intends to prevent the worsening of existing deprivation and to ensure that the finite environmental and resource budgets are available for the universal satisfaction of essential human needs. Rationing ensures that we remain within a fixed ecological budget, thus removing the uncertainty of how consumers will respond to price changes. Socially, it addresses the “relative deprivation” felt in unequal societies by capping the visible excess of the highest earners, which can improve overall social cohesion. From a governance perspective, it shifts the focus of climate policy from individual consumer “choice” to collective responsibility, framing the environment as a shared asset that must be managed fairly for future generations. In line with the principle of common but differentiated responsibilities and respective capabilities, implementation is prioritised for high-income countries in the short term, where the largest consumption imbalances exist, while a medium-term timeline is proposed for low- and middle-income countries.
