Financing Targeted Basic Income Through Carbon Taxation: A Simulation for Türkiye

Mete Dibo (), Özgür Emre Koç, Florina Oana Virlanuta (), Neslihan Koç, Radu Octavian Kovacs, Suna Şahin, Valentina-Alina Vasile (Dobrea) and Marian-Gigi Mihu
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Mete Dibo: Department of Public Finance, Faculty of Economics and Administrative Sciences, Hitit University, Çorum 19030, Türkiye
Özgür Emre Koç: Department of Public Finance, Faculty of Economics and Administrative Sciences, Hitit University, Çorum 19030, Türkiye
Florina Oana Virlanuta: Department of Economics, Faculty of Economics and Business Administration, “Dunărea de Jos” University of Galați, 800008 Galati, Romania
Neslihan Koç: Department of Public Finance, Faculty of Economics and Administrative Sciences, Hitit University, Çorum 19030, Türkiye
Radu Octavian Kovacs: Doctoral School of Economic Sciences, Faculty of Economics and Business Administration, “Dunărea de Jos” University of Galați, 800008 Galati, Romania
Suna Şahin: International Trade and Logistic Department, Istanbul Yeni Yuzyil University, İstanbul 34010, Türkiye
Valentina-Alina Vasile (Dobrea): Doctoral School of Economic Sciences, Faculty of Economics and Business Administration, “Dunărea de Jos” University of Galați, 800008 Galati, Romania
Marian-Gigi Mihu: Doctoral School of Economic Sciences, Faculty of Economics and Business Administration, “Dunărea de Jos” University of Galați, 800008 Galati, Romania

Sustainability, 2025, vol. 17, issue 17, 1-27

Abstract: This research evaluates the financial sustainability of a basic income (BI) model funded through carbon taxation in Türkiye. Unlike classical BI models that provide unconditional transfers to everyone, this study proposes an income support scheme targeted only at those below the poverty line. The model seeks to balance limited resources with the goal of social equity. In this scenario, sectoral carbon taxation evolves progressively. The tax starts with the energy sector, which has the highest emissions, and subsequently shifts to industry and other sectors. Emissions will be reduced by 1% each year, while a carbon tax that starts at USD 12 per ton will be dynamically converted to TL based on the increasing exchange rate year by year. The simulation looks at 2023–2050 and computes annual revenue and expenditure forecasts for the period. The findings indicate that the revenues from carbon taxation are not only sufficient to cover the prioritized expenditure in the targeted basic income (TBI) scheme but also will lead to fiscal surplus in the long run. The research proposes for the first time a framework which integrates social protection and the environmental taxation of carbon, synergizing policies aimed at alleviating income disparity and climate change within Türkiye’s context.

Keywords: carbon taxation; targeted basic income; fiscal sustainability; poverty reduction; environmental fiscal policy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:17:p:7621-:d:1731227

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